Polish Market No. 2 (186) 2012

Polish Market :: 2/2012

PUBLISHED since 1996 No. 2 (186) 2012 :: www.polishmarket.com.pl

Inside:

Commercial Real Estate International Relations Agriculture Tourism Defense

Beyond

night vision Interview with Ryszard Kardasz, Chairman of the Board of Bumar Soldier Joint Stock Company and Director of Bumar Soldier Group

C o mmuting Pe op le. N o w

miejs k i e zak Ĺ‚ady a uto b us o w e w w w. m z a . w a w. p l

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Contents

2/2012

From The President’s Press Office # 6

From The Government Information Centre # 7

defense industry

Cover Story Ryszard Kardasz: President of the board and director of Bumar Soldier: Beyond night vision # 27

Our Guest

Marek Sawicki: Minister of Agriculture and Rural Development: Playing to a different drum # 8

expochem 2012

Jerzy Majchrzak: Polish Chamber of Chemical Industry; Cooperation is crucial # 30

Agriculture

Organic farming # 12

Janusz Rodziewicz: President of Association of Butshers and Meat Producers in Poland: Bullish about the future # 16

Waldemar Broś: President of the Nationas Association of Dairy Cooperatives: Milking the cows # 18

Lucjan Zwolak: Deputy President of the Agricultural Market Agency: ARR: Standing for the interest of consumers and producers # 22

Maciej Piskorski: Agribusiness Finance Department Director at Bank BGŻ; Climbing higher in the food chain # 25

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Real estate

Bogdan Sadecki: Investors in commercial real estate will have a busy time this year # 34

Tomasz Ćwiok: Retail is taking off again # 36

Tomasz Listowski: Partner, Head of Industrial in Poland & CEE Corporate Relations, Cushman & Wakefield: Still going strong # 38

Investment opportunities in the surroundings of PGE Arena Gdańsk # 40

tourism

Rafał Szmytke: President of Polish Tourist Organization: Hands across the oceans # 46

Contents

Jan Sosna: In search for a lasting impression # 47

law

Jan Sosna: A budding industry # 48

Janusz Turakiewicz: Destination of choice # 50

Krzysztof Kwiecień: Energy Law Department, Chałas & Partners Law Firm: Focus on Polish energy market # 64

Bogdan Sadecki with Tomasz Ćwiok: Reality check # 52

Maja Sujkowska: the owner of the European Centre for Legal Consultations: Dispute resolution is here to stay # 66

Jan Sosna: Time travel # 54

Ewelina Janczylik-Foryś: At war over ACTA # 69

International relations

Ewelina Janczylik-Foryś: The Polish optimism # 56 Jarosław Dąbrowski: Managing partner and CEO of Dąbrowski Finance: Many ways to tame the Chinese Dragon # 58

Ewelina Janczylik-Foryś: A new kid in town # 60

Maria Bernat: Director of Confucius Institute in Opole: From China with love # 61

banking

Małgorzata Zaleska: Who will pay for risk in the banking sector? # 62

Cultural Monitor

Cultural Monitor # 72

Maciej Proliński: A hit in the opera # 74

Maciej Proliński: A sponsored life… # 76

events

Silesian Laurels have been awarded! # 78

Business Centre Club picks role models # 80

Academy of Polish Success hands out awards # 84

Showing lives with inner dimension # 84

All inclusive # 63

Publisher: Oficyna Wydawnicza RYNEK POLSKI Sp. z o.o.

(RYNEK POLSKI Publishers Co. Ltd.)

Contributors: Magdalena Szwed, Elżbieta Wojnicka, Bogdan Sadecki, Patryk Mirecki

President: Krystyna Woźniak-Trzosek

Translators: Maciej Bańkowski

Vice-Presidents: Błażej Grabowski, Grażyna Jaskuła

Proofreading: Sylwia Wesołowska-Betkier

Address: ul. Elektoralna 13, 00-137 Warsaw, Poland Phone (+48 22) 620 31 42, 652 95 77 Fax (+48 22) 620 31 37 E-mail: info@polishmarket.com.pl

Photographers: Jan Balana, Łukasz Giersz

Editor-in-Chief: Tomasz Ćwiok t.cwiok@polishmarket.com.pl Managing Editor: Ewelina Janczylik-Foryś redakcja@polishmarket.com.pl Editorial board: Jerzy Bojanowicz, Janusz Korzeń, Maciej Proliński, Jan Sosna, Janusz Turakiewicz

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Polish Market Online Editor-in-Chief: Wiktoria Grabowska Sales: Phone (+48 22) 620 38 34, 654 95 77 Natalia Suhoveeva natalia.s@polishmarket.com.pl Ewelina Surma e.surma@polishmarket.com.pl Public Relations: Joanna Fijałkowska j_fijalkowska@polishmarket.com.pl

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Editorial

The OECD calls us a “star of economic growth” because Poland has the highest real GDP growth of all members of the organization. Since 2007 the Polish economy grew by 15.5%, almost two times more than the second-ranking Slovakia (8%). And although many economists are predicting a slowdown, there are no signs indicating that the situation will change this year.

Data released successively by the Central Statistical Office (GUS) look as if copied from an economics textbook’s chapter on model economic growth. Inflation is on the decrease, industrial and construction output are growing, consumption remained strong in January with no hint of the typical post-Holiday lull in sales, and corporate deposits on bank accounts, which reached a record figure last year, have now shrunk suggesting a revival of private investment in production.

Poland’s external economic relations also look increasingly favorable. After the first wave of the global crisis in 2008-2009, when Poland was the only European country to see positive GDP growth, earning the name of “Europe’s green island,” many commentators attributed this to the country’s relatively weak economic ties with other countries. Of course, there is some truth in that. Poland has a relatively large internal market, with more than 11 million households, which is quite a lot by European standards. Additionally, the market’s growth potential is still underestimated. Many analysts forget that we are still a nation working its way up. Despite the fast pace of growth in the country’s GDP and household incomes, Polish people are still much less affluent than the residents of the “old EU.” Per-capita income statistics do not fully reflect this gap. Consequently, the Polish internal market is more absorptive and easier for the seller in many basic segments.

Simply, if people in the “old EU” can contemplate how to, say, make their houses more environment-friendly, Poles have to figure out how to get money to buy a house. If one takes this into consideration, then it is clear why Polish manufacturers are not desperate to export.

This does not mean that economic relations with other countries are of secondary importance for the Polish economy and Polish businesses. Of course, what counts more in business are facts rather than declarations. The facts are unambiguous and quite strongly question the picture emerging from reports and league tables, even such reputable ones as Doing Business. For example, tax burdens in Poland are among the lowest in the European Union – 31% versus the EU average of 39%. In the past two years, data of Poland’s over 3 million businesses were transferred

to a publicly accessible digital register. And it is now possible to register a business through the Internet.

The structural backwardness of the Polish economy relative to the most developed economies does not involve only the consumer market. It extends to the investment sphere. Our own capital resources are much smaller than our real investment needs. We will have to support our development with external capital for many years to come.

But we are doing a lot to make sure that capital invested in Poland is safe. Today, we do not need to consider adopting the rules of the European fiscal pact because Poland adopted all these rules protecting public finances many years ago. It is written in our constitution that the central bank is independent and that there is a cap on public debt. We have the Monetary Policy Council and the Polish Financial Supervision Authority. And there is an additional buffer in the form of the Bank Guarantee Fund.

The Polish banking sector is one of the most secure in Europe. And the European Commission has praised Poland’s budget deficit reduction plan until 2015.

Invoking the Biblical verse: “You shall know them by their fruits,” the fruits we have got are quite attractive.

The foreign travel component of Poland’s balance of payments improved last year by EUR1.4 billion. What does that mean? “Foreign travel” is the term statisticians use to account for money left in Polish shops by visitors from the neighboring countries: Germany, the Czech Republic, Slovakia and Lithuania. It is not even entrepreneurs but ordinary consumers from these countries that have decided it is worth coming to Poland to do the shopping. It is no wonder then that 13 of the 16 national teams which will be competing in the UEFA Euro 2012 final tournament in four Polish and four Ukrainian cities this summer have chosen Poland as their base. Soccer authorities are also guided by economics.

This is even more true of financiers and investors. In 2011 there was a marked increase in foreign direct investment (FDI) flows to Poland compared to a year earlier. FDI exceeded EUR10 billion and was two times higher than in 2010. The structure of foreign investment in the Polish economy changed, with a marked rise in direct investment coupled with an almost 50% drop in the share of portfolio investment. This means that Poland is increasingly perceived as a solid business partner rather than an attractive place for speculative investors. Welcome to Poland. ::

Krystyna Woźniak-Trzosek President Rynek Polski Publishers Co. Ltd.

2 /2012 :: polish market :: 5

Meeting with the diplomatic corps

Picture courtesy of president.gov.pl

New security strategy

Polish President and the First Lady greet US Ambassador Lee Feinstein and his spouse Ms. Elaine Monaghan.

At a meeting with diplomats accredited to Poland, President Bronisław Komorowski said 2011 had been a good year for the country. “It was a year of difficult trials and challenges, which—I am convinced—we as a nation were able to meet. We are glad about our economic results and favorable forecasts for 2012,” he added.

The president also summed up Poland’s foreign policy. He said Poland

strongly supported maintaining close ties between Europe and the United States as allies and added that during NATO’s May summit in Chicago it would be important “to seek an effective political solution to the destructive Afghan conflict, which has lasted for too long now.”

The president also said Poland was able to have good relations with its neighbors. “The many meetings I have held with my colleagues in Germany, the Czech Republic, Slovakia, Hungary, the Baltic states and Ukraine confirm the truth of the political motto: ‘United we stand’,” he said. ::

Challenges of social economy Opening the conference Challenges of Social Economy held at the President’s Palace, President Bronisław Komorowski said that economy was really about improving the quality of life of society and individuals. A special guest at the conference was Prof. Muhammad Yunus, a Nobel Peace Prize laureate, the founder of an institution providing microcredit, and one of the world’s greatest social innovators. The president said the microcredit system had produced excellent results in South Asia, being also a way to stimulate various spheres of social life and to raise economic activity

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rates among individual social groups, including women. “Equipping others with the ability to take responsibility for themselves and helping them at the difficult start is a problem shared by many countries. It is also Poland’s problem,” the president said. “Poland is a country working its way up and we should consider what we can give to the world – to the regions which are grappling with poverty. On the other hand, we should use the experience of other countries to develop even better and faster and achieve what is the sense of economy - human well-being.” ::

President Bronisław Komorowski represented Poland at the 48th Munich Security Conference devoted to building a Euro-Atlantic security community.

In his address, the president said the time was ripe for the European Union to take a serious approach to its responsibility for security in Europe and surrounding regions, working in synergy with the United States and NATO, Russia and other Eastern European countries. “I am convinced that taking up the long-delayed work on a new security strategy for the EU should be the way to revitalize the EU’s effort in the area of security,” the president said.

The reason why the president stressed the importance of cooperation with the United States is the country’s decision to diminish its military presence in Europe. The president said the signal from Washington was the “last alarm bell,” which should induce the EU to work on a new security strategy. He added that a common platform for Europe and the United States was NATO, an organization which should unite Europe and North America. ::

Debate on GMO Discussion on genetically modified food was held at the President’s Palace as part of Public Debate Forum under the slogan Genetically Modified Organisms.

A Necessity or Choice? A Chance or Threat? Taking part in the debate was President Bronisław Komorowski, who said that all contentious issues should be regulated by a law on genetically modified organisms (GMO). He added he was trying to encourage the government to undertake a difficult debate so as to regulate issues related to GMO comprehensively, by a single law, rather than scatter individual provisions among different laws. The president said he wanted to invite GMO supporters and opponents to a discussion designed to relieve emotions and replace them with concrete knowledge. ::

Meeting with Latvian President President Bronisław Komorowski met with his Latvian counterpart Andris Berzins. He said that trade between the two countries reached EUR1 billion last year and added he was glad that the president of Latvia will be supporting joint projects in the area of energy infrastructure, and gas and electricity transmission, projects which may involve not only Poland and Lithuania, but also Latvia and possibly Estonia.

Andris Berzins shared the Polish president’s view that close cooperation in the energy and economic spheres was conducive to an improvement in relations between countries. The Latvian president said energy was an issue of primary importance for the European Union. ::

Photo courtesy of www.kprm.gov.pl

Prime Minister receives Man of the Year Meeting of the Title from Wprost weekly International Auschwitz Council

Prime Minister Tusk at the Wprost gala

Prime Minister Donald Tusk received the Man of the Year 2011 title from the opinion-forming Wprost weekly at an official ceremony Feb. 7.

The weekly has awarded the title since 1991 to people who have had the greatest influence on Poland’s social, political and economic life. The publisher decided that the man who exerted the greatest influence in 2011 was Donald Tusk, as he became the first Polish leader to be re-elected after the end of communism in 1989.

On accepting the award, the prime minister said he dedicated it to Polish people, who “in the past four years showed everyone in Europe that Poland is a country completely different from what it used to look like to many nations.” Among the winners of the title in previous years are Nobel Prize-winning poet Wisława Szymborska, former Polish Prime Minister and former President of the European Parliament Jerzy Buzek, legendary Solidarity leader Lech Wałęsa, former European commissioner Günter Verheugen and economist Leszek Balcerowicz. ::

Prime Minister Donald Tusk took part in the last meeting of the International Auschwitz Council before the expiry of its present term in office. Set up in 2000 by then Prime Minister Jerzy Buzek, the Council is an advisory body to the head of government. Its activities are focused on the former German Nazi death camp built in the occupied Poland.

The prime minister thanked the Council members for their work. “You work to preserve the universal memory of a development which could have been the most important one in modern history,” the prime minister said. “We all want Auschwitz-Birkenau to remain forever a strong and clear warning— not only in the memory of Jews and Poles but in universal memory.”

The prime minister added that the EUR100 million in subsidies for the Auschwitz-Birkenau Foundation was a very impressive amount, especially at the time of crisis. He also emphasized the role of Władysław Bartoszewski, president of the Council, whose energy and effort have contributed to the Council’s success. ::

Prime Minister meets with ministers over reform program Prime Minister Donald Tusk started meetings with individual ministers to discuss progress in the reform program he had promised in his policy speech in the parliament after his re-election. He talked with the finance minister, who is responsible for curbing growth in local government debt and deficit, and creating conditions for introducing the fiscal rule for the whole public finances sector. They also talked about the implementation of the budget and effectiveness in collecting taxes.

The prime minister and minister of labor and social policy discussed planned amendments to the law on pensions designed to reform the

pension system. The new provisions are to ensure security to the pension system, in connection with demographic changes, and to public finances, as they are supposed to curb growth in public debt. Since 2013 the retirement age is to be gradually raised from 65 to 67 years for men and from 60 to 67 years for women.

The prime minister also met with the economy minister to discuss draft laws on reducing some administrative burdens on business. During the meeting with the justice minister, the prime minister discussed guidelines for draft amendments to the penal procedure code and other laws aimed at shortening court proceedings by one third. ::

No to ACTA Prime Minister Donald Tusk promised to take measures aimed at rejecting the ACTA agreement at European level. He had talked about the issue with deputies to the European Parliament. He sent a letter to the leaders of all parties in the Group of the European People’s Party (EPP) proposing that ACTA in its existing form negotiated by the European Commission should be rejected. In

his view, a deeper debate is needed before taking any regulatory decisions. The prime minister said he would raise this issue at the next meeting of the European Council in Brussels at the beginning of March. He assessed that ACTA did not correspond with the reality of the 21 st century where Internet is a space as important as the real space, if not dominant.

“Analyses made so far indicate that we should seek an equilibrium, but also a different legal space, one which is still imprecisely described by national codes,” the prime minister added. He promised that consultations about Internet freedom would be continued.

“These debates, with the participation of experts and interested communities in Poland, give us a chance of working out a modern model to regulate property rights while at the same time protecting freedom and the right to anonymity on the Internet,” he said. :: 2 /2012 :: polish market :: 7

Our Guest

Playing to a different drum In an interview with The Polish Market Marek Sawicki, Minister of Agriculture and Rural Development speaks about the new EU financial perspective 20132020 and reform proposals for the Common Agricultural Policy.

Poland’s Presidency of the EU Council engaged in a debate on the Common Agricultural Policy.

What is the main flaw of the CAP? The CAP lacks a prospective view of the European agriculture sector after 2020. In order to be more competitive, European agriculture must develop.

Effective management of a farm is not possible in a situation where

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60-70% of its revenues depend on bureaucratic decisions as to the CAP direct payments. In Europe, there are regions where farmers’ revenues do not depend on their financial results, which makes farmers reluctant to further develop their activities and take risks.

It seems that the UE is today entirely preoccupied with fighting

the economic crisis. Do you think the crisis will have a significant impact on the future CAP? I hope that the crisis will help understand current risks. Agriculture was, is and will always be, a specific branch of economy. It is not the way it is in industry. Here, the production is planned in a multi-year perspective. It would be best to make plans until 2020 or even 2050. Yet, a lot of

Our Guest

European politicians would rather stick to the status quo and continue redistribution of the financial aid for farmers through the CAP. These politicians do not look beyond the perspective of the next elections.

What did Poland do to change such an attitude?

During our Presidency, upon agreement with the President of the European Parliament’s Committee on Agriculture and Rural Development, Paolo de Castro and the EU Commissioner and Rural Development, Dacian Ciolos, I suggested, in Wrocław, that public debates should be held with regard to the CAP. As a result, three debates were organized showing that no one was happy with the proposals by the European Commission: not only MEPs, but also representatives of the agricultural unions and organizations, experts and academicians.

Poland points to two factors of support. The first one should be the surface of arable land, as well as environmental and climate conditions in a given area. The second one should be the cost of farming in the areas that are precious on account of their environmental assets. We support the extension of forest cover and the withdrawal of agriculture from these areas.

Furthermore, we opt for splitting the CAP budget into two equal parts: one of them would be allocated to direct payments, while the other would be distributed among farmers for the development purposes. It means that more resources should be spent on innovation and modernisation. This system has proved successful in Poland since our accession to the EU in 2004. Polish farmers keep investing and develop their activities without receiving such high payments as their peers in France or Germany. It means that they are paid not only for the production readiness, but also for increasing competitiveness.

In Poland workforce is not cheap any more, since many people emigrated to France, the United Kingdom, Germany and other Western European countries, where they pay taxes and contribute to the growth of their economies. That is where cheap workforce is now.

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You can get the impression that the CAP is focused exclusively on payments for farmers…

The CAP is already 50 years old. It is a good moment to take a look at it with a fresh perspective, taking into account current challenges. We have an excellent opportunity to eliminate the elements that hamper competitiveness and pose a threat to the future of European agriculture. One of such elements is no doubt the system of direct payments. Having enquired the European Commission how the CAP will look like in the next financial framework, we were told that it could abandon the Single Payment Scheme (SPS) and the Single Area Payment Scheme (SAPS).

Then, it appeared the European Commission decided to renounce the SAPS, while maintaining the SPS. There was no debate whatsoever on this issue among decision-makers.

I am seriously concerned with the proposals by the European Commission, for they do not respond to real needs. For example, there are people who bought arable areas and thus were regarded as farmers although they continue with their previous occupations and have nothing to do with agriculture. We will not support such “farmers”. We will assist real farmers, those who work the land.

Another issue is agriculture and environmental protection. No sooner the European Commission had assessed Poland’s performance with respect to the agriculture and environment rules than it charged our farmers with new ecology-related tasks, including the reduction of CO2 emissions.

Such costly tasks are imposed on farmers with no additional resources being allocated to this purpose. We were instructed to devote 30% of the allowances to ecology goals. These are the same for farmers in Poland, Estonia or Greece. However, once you consider available resources, it will appear that an Estonian farmer receives 16 euro, his Polish peer 50 euro and a German one as much as 150 euro. You cannot call this a common agricultural policy. This example shows how direct payments pervert the principle of equal competition.

We want to change it.

This philosophy is determined historically...

We are not at the same place we were many years ago. We encourage our European partners to go through the agriculture figures in Europe, including those illustrating production and costs. You can often hear that the production costs are low in Central and Eastern Europe. It is a myth. The truth is that our farmers pay more for fertilizers and chemicals than their German peers because manufacturers do not offer them so preferential prices. Another myth is that of cheap workforce. In Poland workforce is not cheap any more, since many people emigrated to France, the United Kingdom, Germany and other Western European countries, where they pay taxes and contribute to the growth of their economies. That is where cheap workforce is now. By way of example, all the major Dutch vegetable growers hire foreigners. So talking about cheap workforce does not make sense any more. It is essential to have a clear vision of the future. On the single European market we are witnessing the equalization of the costs of labour and production in the agricultural sector.

Disparities can only result from such factors as the quality of soil and climate conditions.

Allowances should precisely reduce these disparities. In other words, disparities should not be due to the farmer’s country of origin, but only to the differences in farming conditions that I have already mentioned.

W hat are the odds that the CAP will follow these principles?

Not everyone realizes the consequences of the Lisbon Treaty. It is a Polish proposal to hold public debates that was the first step to exploit the new position of the European Parliament and the European Commission in the process of legislation.

We are not waiting idly for the decisions, but we do focus on looking for allies to support our concept of the CAP reform. I am confident that we will succeed because it lies in the interest of European agriculture, not only Poland’s. It is in the interest of European agriculture and European consumers. ::

Agriculture

Organic farming A colorful mosaic. Lakes surrounded by strips of land and woods; crisscrossed by dirt-roads—a playful mixture of colors and shades. This is an aerial view of Poland. But close to the ground it is even more interesting.

With the mountains in the south, through the woodlands of Białowieża and Kampinos natural preserves in eastern and central Poland, the thousand Mazurian lakes up in the northeast, the rich soil of the Świętokrzyska upland in the center, the mighty Vistula and Oder rivers that slowly flow to the Baltic sea, once can clearly see that the land must be closely associated with agriculture.

Environmental balance For decades only a small of Polish farmers could afford expensive fertilizers and plant protection products.

This is why the traditional culture of farming, known in Poland for centuries, was improved to the point of perfection. The care for bio-diversity was a natural way of farming, perfectly following the course of nature.

When in 2004 Poland joined the European Union, many farmers feared the competition from their colleagues from Western Europe, where intensive farming methods were widely applied. However, soon it became clear that what looked like a drawback was

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Agriculture

25000

23431 20956

20000 17423 15206

15000 12121

9194

10000 7182

3760

5000

2286

0 2003

Chart 1: The number of farms managed in sync with organic farming regulations, in 2003–2011

2004

2005

actually a big plus. The lack of a wide application of chemical substances is an excellent predisposition for the Polish farmers to produce organic food that is in such a heavy demand in Europe. This comes with the backing of diversified researches programs—the combination of organic and innovativeness.

2006

2007

2008

By the end of 2011 the total area of land cultivated following organic farming regulations reached over 573,000 hectares, which equals 3.8% of the total arable land. When it comes to farmers who stick to the organic regime their number was 23,500 on December 31, 2011, a 12% year-on-year growth.

Production structure Dynamic development Organic agriculture has seen a significant development in recent years in Poland with growing numbers of organic farms, processing companies and the area under cultivation. It is also indicated by the growing numbers of certifying bodies.

The shortest characteristic of the Polish organic farming sector is “a wide variety of products”. Hams and other meat products, delicious cheese, dairy products and corn-based food, from bread to cornflakes and high quality flour, are solid items on the list of Polish organic food. The sector of vegetables and

2009

2010

2011

fruits offers quality juices, jams, marmalades, marinates, dried and pickled food. All that produce is in fact something very unique—organic food from Poland.

In the end Organic agriculture is a dynamically developing branch of farming in the world. It is no different in Poland where organic farming has increased in recent years and outputs quality products with the use of environmentally -friendly technologies and techniques.

It is safe to say that the further development of organic farming will be the constant element of the farming sector in Poland. ::

Find more information about organic ­farming and food: Ogólnopolskie Stowarztszenie Przetwórców i ­Producentów Produktów ­Ekologicznych Polska ­Ekologia: Tel. + 48 791 999 724 polskaekologia.org e-mail: polskaekologia@go2.pl

Stowarztyszenie Producentów Żywności Metodami Ekolo­gicz­nymi Ekoland: Tel. + 48 52 384 81 10 ekolandpolska.pl e-mail: biuro@ekolandpolska.pl

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Agrol P.P.H. Sp. z o.o. launched its operations in 1996. Our products are made using specially selected grains of top quality corn. The company’s core operations are based on its own groatsprocessing plant equipped with state-of- the-arts machinery.

Thanks to the first-rate quality of our products and individual service offered to our trade partners, we have become the leader on the Polish market of cereals, rice, groats, peas and beans. We are also selling fresh fruits and vegetables.

Since 2003, we have enforced the HACCP food safety management system which guarantees high quality of products offered for sale.

We are the laureate, among others, of the Export Leader Award received in 2005 from the Province Business Forum under the patronage of the Mazowieckie province Chairman. We have also won the Polish Food Producer Certificate.

Products offered by AGROL promote healthy lifestyle, are widely used in dietetics and support weight loss.

AGROL

Przedsiębiorstwo Produkcyjno‑Handlowe Spółka z o.o.

09-140 Raciąż, Płocka 53 tel.+48 23 679 10 10, +48 23 679 18 55 tel./fax +48 23 679 11 18 www.pph-agrol.com.pl

Food industry

Bullish about the future Poland is one of the largest meat producers in the European Union, and is becoming an important player in the global market as well.

What is driving the growth?

Before Poland joined the European Union, Polish farmers were enthusiastic about the prospect of becoming a part of the word’s second largest meat market. With the help of pre-accession funds most Polish slaughterhouses undertook major investment projects to modernize their operations and boost their output. When Poland did join the EU in 2004 the Polish meat industry began to sell big. Despite that, meat producers could effectively sell between 30% to 50% of what they could actually produce. Selling to the markets outside of the EU was inevitable.

What is in the offing for the markets outside of the EU? We focus on beaf and poultry because it is cheaper to produce in Poland than in other countries. Pork, on the other hand, is relatively more expensive because pork farmers prefer to work individually instead of as parts of production groups that comprise specialized partners such farmers, fodder producers, butchers and processing companies. Pork made in Denmark is 10-15% less expensive than that produced in Poland because of highlyspecialized approach to the production process. But when it comes to beaf or poultry, they can not beat us.

What are the main export markets outside of the EU? The Middle East, South Korea, Israel and selected EU markets. Turkey was number one in 2011 because the country opened up its market to meat from Poland. The Turkish consumer values quality meat and that is why we were able to sell so much there. In fact, the sales were so good that our livestock decreased and we had to focus on breeding more cows. But we have

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Picture courtesy of SZiPM RP

Polish Market talks with Janusz Rodziewicz, President of the Association of Butchers and Meat Producers in Poland, about the challenges the industry is facing.

rebuilt it and hope that good exports to Turkey will continue this year.

How does the association help producers enter foreign markets?

We utilize EU funds for marketing European foods in the markets outside of the EU. Recently we have been executing a marketing campaign dubbed The European Table. The EU provided 50% of the funding for this program, with 30% of the money coming from the Agricultural Market Agency, a Polish government institution, and 20% from Polish meat producers. We attend selected trade shows.

At each show we had a 100 sq.m. of exposition space. Renowned cooks such as Ernest Jagodziński, Marcin Sasin and Marcin Suchenek, prepare tasting

We lobby the parliament and other institutions, help our members obtain all information they need to successfully go through the administrative and veterinary procedures required in the countries they plan to sell to and coordinate veterinary inspections from those countries.

menus for our guests. Our guests love it. We also buy advertising campaigns in consumer press in the host country to reach with our message to local foodies.

How would you explain the fact that the Polish meat, especially beef, is so highly valued?

It is about our farming culture. For decades Polish farmers were growing their cows and processing the meat with almost no application of chemical additives. We let the nature take its course first. This is now called ecofood, but we have had it for decades and have been perfecting it from generation to generation. This is why our beef is so tasty and healthy.

The association has been engaged in promoting Polish meat abroad.

How about the domestic market?

Are there any promo programs aimed at the domestic consumer?

We have indeed adopted some solutions. A fund for promoting food products in Poland was established two years ago. It covers different types of products in nine categories including all types of meet. Producers pay 1/1000 of the value of their produce to the fund. In cooperation with the fund we have executed a promo event in Poznań last year to promote beaf, pork and poultry. It was a reasonable success and we plan to visit all major Polish cities with a similar promo program in the years to come.

Apart from orchestrating promotional tours and events in Poland and in selected markets, what other benefits does your association offer to its members?

Our association has approximately 200 members, mainly small and medium-sized companies in the meat production sector. Our primary goal is to integrate our community, which is a pretty large one—the meat sector employs nearly 100,000 people in Poland. We lobby the parliament and other institutions, help our members obtain all information they need to successfully go through the administrative and veterinary procedures required in the countries they plan to sell to and coordinate veterinary inspections from those countries. So we are quite helpful and useful to our members. ::

Nobility Of Taste Gold Medals

Poznań International Food- Fair 2011

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Festi ve H am

Frank s w i th ham

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In 2011 Sokołów S.A. once again won Gold Medals of Poznań International Food-Fair. Among prize-winning products were: Gold Dry Krakowska, Festive Ham and Franks with ham. Moreover, Sokołów S.A. was rewarded with Gold Emblem in all-Poland Consumer Laurel contest 2011 in pork and poultry meat category. According to “The most valuable Polish brands rating” ( Rzeczpospolita daily) and TNS Pentor findings, Sokołów S.A. company has been the leader on Polish meat market for years.

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www.sokolow.pl

Dairy industry

Milking the cows Polish Market talks with Waldemar Broś, president of the National Association of Dairy Cooperatives, about the industry’s growing sales abroad and in Poland.

It seems that 2011 was a good year for dairy producers, measured in value, as their exports grew by 17% when compared to the 2010 numbers. What is the driving force behind the growth?

One of the factors is the growing demand for dairy products worldwide. Consumers abroad are also becoming increasingly aware of the high quality of the dairy products from Poland. This is why our exports of powdered milk and maturing cheese did so well last year.

W hat are the main export markets?

They differ depending on product category. Overall, the largest export markets are EU countries—they generate up to 85% of our export revenue in all product categories. The remaining 15% sells outside of the EU. I n terms of individual markets, what are the main export destinations?

The largest export markets for milk powder are Algeria, Germany, Belgium, the Netherlands, Mexico and Bulgaria. When it comes to butter, the largest markets are Germany, the Netherlands, Belgium, the Czech Republic, Slovakia, France and Russia. In turn, maturing cheese sells best in the Czech Republic, Italy, Slovakia, Russia and Hungary.

What markets have the largest export potential for the Polish dairy industry?

Russia is a very interesting market for us. Poland is the world’s sixth largest producer of cheese while Russia is the number one importer of cheese in the world. However, the share of Russia in our total sales portfolio is only 6-7% of our total produce.

Our main exports there are cheese and butter. We hope to double our

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exports to Russia in these product categories in the years to come.

L ooking from the perspective of the Polish dairy industry, what are the incentives for exporting to Russia?

There are many incentives. Russia is relatively close to Poland so the shipping costs are low. Also, Russian consumers have similar culinary tastes to Polish consumers so the same type of cheese can be sold in Poland and Russia. Third, Russian buyers pay good prices. Russia is also a really huge market—there are cheese producers in Poland who manage to sell as much as 50% of their output in the Moscow area alone.

W hat do you think can harm the exports of dairy products this year? What are the threats?

The global economic crisis may be a factor especially when you look

at the sales of cheese in the premium price category. On the other hand, however, people have to have food. Dairy products are nutritious and healthy so they will always be selling.

Another important issue is the złoty and euro exchange rate. If the euro sinks below the PLN 4.2 level, our exports do not generate enough revenue to offset the costs. For instance, last year the price of rough produce grew by 15% while the cost of packaging by 20%. So, the premium we generate through exports went down significantly which has a negative impact on our investments especially in innovation and technology. Yet, we are committed to export some 30% of our output this year.

How important is innovation in the dairy industry today?

Some 70% of dairy production in Poland is generated by cooperatives.

They successfully tapped into the EU funds to boost their potential to produce highly-processed dairy products because this is where the added value is. Many of them imported new technologies and production lines. As a result, while in the past our main products were milk, milk powder and some cheeses, today our largest product category is cheese. Poland exports 150,000 tonnes of cheese annually. Also, the share of whey powder in our exports has been constantly increasing in the last few years.

With the increasing exports, how important is the domestic market?

Poland is our primary market. It generates some 70% of our total sales.

But there is room for improvement there. The consumption of dairy products in Poland equals 191 liters of milk per head today. It is a significant raise from 176 liters only a few years ago. We managed to boost the consumption of dairy products through our educational campaigns targeting young people and their parents. But there is still room for improvement—the average consumption in Poland should be around 250 liters per head, just as in other European countries.

There are also business incentives in selling in Poland. Transportation costs are low and you don’t have to watch the złoty/euro exchange rate to see whether or not you are making profit on your sales. ::

Regional Dairy Cooperative in Koło

www.osmkolo.pl

Today it’s an experienced company, which cultivates the dairy tradition.

• in 2006, started up the most modern butter production line in Poland • in 2008 built the biggest powdered milk in Europe More than 60% of the production is exported all over the word.

Key products include: • skimmed milk powder • skimmed milk powder agglomerated • full cream milk powder • instant full cream milk powder • instant fat filled milk powder • extra butter in blocks In Poland the most distinctive product is a country cheese (cottage cheese).

An excellent opinion among consumers has the extra butter, awarded the title “Buttery Hit”.

The management system of OSM w Kole has been assessed and certified as meeting the requirements of Global Standard for Food Safety (certificate GB/10/81675) and ISO 22000:2005 (certyfikate GB/10/81726.00)

Powdered milk factory

Mr Czesław Cieślak is the President of Regional Dairy Processing Factory since 1992. His activity is based on philosophy “Taste, Health, Ecology”. The processing amount was 64 million liters of milk per a year when Mr Cieślak became the President of Dairy. Nowadays the Dairy is processing over 180 million liters of milk per a year. This fact is measurement of his success.

President Czesław Cieślak

Dairy industry

Small and powerful Blue cheese has been produced in Poland for longer than many think…

Lazur Dairy Cooperative undertook the production of blue cheese in 1959. In the beginning it was difficult because there was no tradition nor knowledge of how blue cheese is made. The company had a very limited access to the information it needed but their food technologists talked to people who traveled to France, England, Italy and Germany and learned from them. It was indeed a try-and-err approach and many of their experiments failed. But once they got every step of the process right our dairy was able to commence a commercial production of blue cheese. What they found out later was that the market was not quite ready to accept the new product. The company was getting many complaints from consumers who though the cheese they bought was simply bad. It was still a long way to go for blue cheese...

Betting on blue cheese In 1997 commercial banks began to offer low-interest credits for investments in dairy cooperatives. The company wanted to modernize as well but in order to tap into the program it had to shoulder 30% of the cost of our planned investment. Because Lazur was a relatively small cooperative, it could not raise enough money to modernize all production lines. The company decided to drop mass-market products, such as

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milk or butter, because they knew they would not be able to compete with big dairy cooperatives anyway. Instead, Lazur focused on a new market niche— the mold cheese.

Building the niche In the 1997 Lazur was not the largest producer of blue cheese in Poland.

The quality of Lazur cheese, however, was superior to any other blue cheese available in the market. The company used quality rough products from our cooperative milk farmers. It soon followed up with new investment projects. Come 1998 Lazur launched a new product line—the Lazur blue cheese in 100-gram boxes. In the early 2000s the company was the unquestionable leader in the segment of blue cheese in Poland.

Facing challenges In order to run a dairy cooperative like Lazur, which is owned by milk farmers, the management has to combine their interests, which is good price for milk, with the longterm interest of the company, which is a stable cash-flow, revenue generation and development.

It is not easy but the Lazur has done a good job.

Another challenge comes from the competition. They are established cheese brands with huge sales networks. On the other hand Lazur is a small, niche producer from whom some retail chains do not want to buy directly. The company needs to resort to the middlemen, which is a challenge.

But, again, it has been quite successful in this respect. Lazur has managed to cover nearly all retail outlets and dairy stores the country over and the company has strong connections with foreign vendors as well. ::

In order to run a dairy cooperative which is owned by milk farmers Lazur had to combine their interests, which is good price for milk, with the long-term interest of the company, which is a stable cashflow, constant revenue generation and the investment in the company’s development.

Advertorial

Cogeneration – a chance for the environment and energy sector Ener-G Polska Sp. z o.o. operates on the Polish market in the area of energy generation and the supply of energy production technologies based on the use of renewable sources, cogeneration and waste (gasification). It also offers energy management systems. The company is a leader in the supply of environment-friendly and energy-efficient technologies. It has a well-established position as Europe’s leading supplier of cogeneration systems, thanks to its wide experience and a proven record of excellence.

Contact: www.energ.pl biuro@energ.pl

Cogeneration is one of the many technological concepts for converting primary energy contained in fuels. It is an environment-friendly technology

for the combined generation of heat and power. It enables converting energy contained in a gaseous fuel into electricity and heat in a single process.

Electricity generation from a gaseous fuel means a reduction in fuel consumption and carbon dioxide emissions, lower costs of using primary energy, stable costs of electricity, the ability to raise output without exceeding emissions limits, and tradable energy certificates. Cogeneration is a highly cost-efficient technology in the case of such fuels as landfill and mine gas because of their low prices. The use of

these gaseous fuels for energy generation reduces methane emissions to the atmosphere. This is important because methane is a greenhouse gas 20 times more potent than carbon dioxide. Ener-G Polska offers a wide range of cogeneration solutions for places where they are typically applied: hotels, sports facilities, hospitals, military bases, schools, manufacturing sites, hypermarkets, airports and so on. The company provides complete services – from a system’s design to its construction, installation, start-up and then maintenance. :: ADVERTISEMENT

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Agriculture

ARR: Standing for the interest of consumers and producers Lucjan Zwolak, Deputy President of the Agricultural Market Agency (ARR), writes about the tasks and a stable role played by the ARR in respect of intervention on agricultural markets.

ARR is an active and important partner in national and international projects. The ARR representatives take part in working out Poland’s positions in policy making on the EU level and act as experts for the EU Council and the European Commission. In 2011, under the Polish Presidency in the EU Council, ARR held two important conferences. In September the Agency held the 30th Conference of Directors of EU Paying Agencies, to discuss the issues resulting from the implementation of EU provisions regulating the Common Agricultural Policy. Another conference, in November 2011, entitled “The Promotion of European Agriculture— A New Approach” focused on the new legislative package on information and promotion of agricultural products under the CAP worked out by the European Commission.

Crisis management In 2011 the Agency also handled some extraordinary situations. In January the pork market began to fluctuate, mainly in Germany. The Agency reacted by subsidizing pork storage, with which it cut the supply of pork by approximately 10,000 tonnes. In turn, in May and June, the e-coli bacteria stirred a crisis in the vegetables market. The EU opened up an aid program for vegetable farmers.

In Poland 5,000 farmers participated in the program and they received about EUR 45 million through ARR. Such crisis management is becoming an important part of ARR’s mission.

Since weather extremities are becoming increasingly frequent and cause interruptions in livestock farming, the Agency rests assured there will be plenty to do in the years to come.

Stimulating consumption Based on a law passed by the Polish Parliament on 22 May 2009, which

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governs of promotional funds for agricultural and food products, ARR has opened 9 individual funds for such products as pork, grains and processed grain products, vegetables and fruits. In creating of the funds the Agency drew from the long-term experience of the Dairy Promotion Fund. The main mission of the new funds is to boost the consumption of the products in question in Poland and abroad. The Managing Committees play an important role in the funds: they in fact decide what the money is spent on and what specific strategies are employed to best help boost the sales of those products and reinforce their market position abroad.The money for the fund, as envisioned by the regulations, comes from food producers who pay 0.01% of the value of the products they introduce to the marketplace. Out of nearly 8,000 companies nearly 6,000 contribute to the fund regularly. In the case of milk producers, however, their levy to the fund equals PLN 0.001 per each kilogram of milk. This way ARR managed to collect over PLN 80 million so far, out of which PLN 50 million has already been spent on promotion. Along with the promotion funds, ARR manages promotion and information campaigns.

Last year the Agency submitted proposals for 5 programs in Brussels, among others, promoting apples in Russia and Ukraine, poultry in Germany, and pasta in Ukraine. All the programs were approved by the European Commission, a fact that the Agency is proud of.

Training and education ARR works closely with all branches of the agricultural sector by offering training courses and conferences and helping prepare the applications for EU aid. One such program, called “School Milk”, covered over 17,000

educational establishments. Thanks to this program, some 2.5 million children in Poland drink milk at school and pre-school institutions today.

Another program, initiated in 2009 by the European Commission, called “School Fruit Scheme” targets primary school children promoting healthy nutrition habits and aims at cutting the obesity rate among the youth.

Each child in the program receives fruit and vegetable-based meals, which include juices or fresh fruits and vegetables. The children get the healthy meals several dozen times a year free of charge. Yearly the agency spends PLN 50 million to promote fruits and vegetables under the program, of which 75% is sourced from the EU. Poland is the EU leader in the two programs, they boosted the per head consumption of milk by 20 liters a year since 2005.

Helping producers Along with a wide variety of consumption boosting mechanisms that ARR administers, the Agency manages 10 mechanisms that impact on agricultural production. They cover such areas as the qualified seed material, dried fodder, tobacco, starch, flax and hemp. More than 60,000 producers of qualified seeds are covered by the program which consumes approximately PLN 100 million a year.

The Agency anticipates that this year more qualified seed producers will express interest in the subsidies because the quality of the seed harvested last year is inferior. Farmers who have not used the subsidies so far are encouraged to take the advantage of the system and submit their applications to the Agency. There is money earmarked for this program.

Quality service The audits performed last year by the EU and the Finance Ministry confirmed the high standards, credibility and accuracy with which the Agency implements the programs.

The Agency was found to have properly distributed the funds to the beneficiaries working in compliance with high service standards. With this the Agency has confirmed its high standing in the league of the public administration institutions that are the best in accomplishing their mission. ::

Advertorial

We are experts in meat industry!

Union of Producers and Employers of the Meat Industry (UPEMI) is the professional organization representing the meat processing industry in Poland. Its members are: owners of the meat plants, processing and disposal plants, representatives of pig and cattle breeders, producer associations and catering institutions (in total around 150 members).

The organization’s priority is to protect the economic interests of its affiliated companies.

UPEMI represents producers and employers of the meat industry in dealing with the centred and local government as well as national and international institutions.

Moreover, UPEMI has established the Quality Assurance for Food Products System related to procedures to ensure not only the safety of food but also its higher quality. It is designed for pork and poultry elements. Interestingly, the QAFP system consists of clear regulations regarding each party involved in every stage of the meat production process- starting with the farmer, logistic system, food processing

plant as well as producer. It is an open system- whoever meets the standards can become a QAFP member.

The President of the Union of Producers and Employers of the Meat Industry, Mr. Wiesław Różański, has the extensive knowledge and experience in the meat market: “We conduct intensive activities designed to promote the meat industry not only in Poland but also all over the world. Interestingly, due to the campaigns we have carried out, our organization has become a recognizable and reliable partner in many countries worldwide.”

Nowadays, the world trade of pork among the major exporters of the European Union, the United States to the East Asia is growing.

Strong export performance was possible in 2011 due to, among others, the weakening of the euro and U.S. dollar, and most importantly, very high demand in that region. Interestingly, exports to the third-country markets from Poland increased nearly a quarter in comparison with 2010.

Thus, our present campaign “Tradition, Quality and European Taste” is designed to provide information as well as promote the European taste of meat. Mainly, it is inspired by the rich tradition in pork and beef production and the strong commitment to quality and uniqueness of meat and its products in Europe. The two-year program was launched on March 7 2011 with the target markets of the U.S., South Korea and Vietnam. Furthermore, the campaign is funded by the European Union and the Polish Government. Accordingly, it is a follow-up of the “Table Full of Tastes” campaign implemented in the U.S.

as well as Korea, in 2008 and 2009. The project was also aimed at promoting European meat and finished with a great success and increase in meat exports.

Additionally, the present campaign is seeking to disseminate knowledge on how European meat can be exported to non-European countries in compliance with the applicable laws and regulations. The activities involve meat sector leaders from Poland who have a strong understanding of the industry as well as knowledge and are well-placed to show the opportunities that may be offered to the target markets.

In the present time, the EU stresses the need for promotional activities that support European meat exports, in order to maintain the perception among consumers of European meat as a product of high quality and unique taste.

What is also important is the fact that our organization opened and ran a Polish restaurant at the Expo 2010 in Shanghai. The traditional Polish dishes were appreciated by restaurant guests. The Polish pavilion, in which the restaurant was situated, was visited by more than 8 million people, at the same time being the most popular place of the exhibition.

Importantly, we have signed an agreement with the China Meat Association, in order to encourage and strengthen the meat industry trade and investment delegations between China and Poland. Thus, the agreement shall not only contribute to boosting mutual trade but also developing individual investments in those countries. Furthermore, it is important to stress that UPEMI coordinated the visit of the Chinese inspectors in Polish meat plants applying for obtaining permission to export pork and its products held in November, 2011.

Consequently, the mission of the Union of Producers and Employer of the Meat Industry is to take care of the meat industry in addition to its members with the purpose of creating a successful and flourishing industry. ::

At Korea Food Expo in Seul: Carlos Gonzalez Tejera, culinary expert; Łukasz Stokłosa, GM, Food Processing Łuków; Małgorzata Łazarska, Sales Department Director, Salus Meat Processing Plant; Wiesław Różański, President, UPEMI; Klaus Dieter Borchard, D Directorate Director, European Commission; Hans Erwin Barth, D Directorate Manager; Edward Łukosz, President, Łukosz Meat Producing Company; Piotr Kondraciuk, Food Promotion Department Director, Agriculture Market Agency ARR; Bogdan Noga, Director, Skiba Meat Producing Company.

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Agriculture

Climbing higher in the food chain

Bank BGŻ has approximately 24% of the market share in financing small and medium-sized companies in the agricultural sector in Poland.

What is driving the business?

Preferential loans for farmers with the interest at 2%. This program is subsidized by the Treasury which shoulders a part of the interest on those loans. And the credit lines for this years have been exhausted. But this is relatively inexpensive money and a very interesting proposition for small and medium-sized farmers. The maximum loan a farmer can get is PLN 4 million.

Processing companies can get a loan of up to PLN 16 million.

Farmers can get those credit for upgrading their production potential but also for the acquisition of more farmland—the latter is very much in demand today. Apart from farmers, big and small, there are some big processing companies in our client portfolio that have resorted to preferential loans and are very much satisfied.

I have to say, however, that access to relatively cheap credit led some farmers to overestimate their investment.

They now have production overcapacity problems and look for new markets for their products.

They are real business leaders in their sectors of production. Some of those farms are owned by foreigners who came to Poland mainly from the Netherlands and Denmark and saw business opportunities in agriculture. But even those farms utilize the local management talent and skills.

Are Polish farmers good managers?

There are some 1.4 million farms in Poland which are entitled to the farming subsidies. However, only some 350,000 of them are farms that produce commercially. The rest are farms that produce food to meet their own needs. The farms that are commercially operated are mainly big, usually of over 1,000 hectares. Their number has been growing in recent years.

They are very well managed enterprises with modern equipment, good management style. They utilize innovative technologies such as GPS positioning for the optimal use of their arable land.

How about bio-gas projects?

Bio-gas power generation is a very interesting idea because it utilizes a lot of animal waste. This is a good proposition for big farms and processing companies. But the technical aspects of such projects are even more complex than in the case of wind farms. We have extensive expertise in this area as well because we have been involved in bio-gas projects undertaken by big food production firms.

Talking about investments in the agricultural sector and innovative technologies, what are the main trends today?

A popular trend is to invest in renewable energy. One of our loan products, dubbed Green Energy, caters just to that type of investors. We have accomplished some very successful projects in wind farms already and have accumulated unique knowledge about how to put together financing for renewable energy projects. The important aspects of project financing are technical, such as wind audits of the proposed sites. Wind audits are critical because if those projects are to be economically viable, investors have to have long-term understanding of how much energy they can generate from wind turbines in the sites they eye. So as a bank we not only offer financing to investors but also expertise.

Renewable energy is an important part of the energy mix policy in Poland as the country has to comply

Picture courtesy of Bank BGŻ

Polish Market talks with Maciej Piskorski, Agribusiness Finance Department Director at Bank BGŻ, a part of Rabobank, and the largest bank specializing in the agricultural sector.

with EU regulations which make it mandatory for Poland to produce 20% of its energy from renewable energy sources by 2020. How do you see the legal framework helping investors in renewable energy today?

Renewable energy is a macro-scale issue indeed. What we are looking forward to seeing is a new act governing the so-called Green Certificates, a regulation that allocates financial grants to green energy producers. Green Certificates help some investments project turn profits. But the Green Certificates mechanism is only active until 2017 in light of today’s regulations. Investing in renewable energy is a longterm business. It is important for investors, therefore, to know whether or not they will be able to factor in the income from Green Certificates beyond 2017. We are looking forward to seeing new regulations governing Green Certificates as soon as possible.

There is also another problem associated with energy and agriculture.

Energy costs are on the raise in Poland.

And the cost of energy is an important 2 /2012 :: polish market :: 25

Agriculture part of the final product price. With the growing prices of food that are anticipated in the years to come, food producers who will have assess to inexpensive energy will be able to cut the final price of their products so their products are more competitive in the marketplace. So the price of energy is a very critical aspect of the entire value chain. For food producers in Poland it is a very important issue. I hope that the European Union will also see it and adjust its policies toward renewable energy producers accordingly.

Talking about adjusting EU policies to meet the challenges of the present day and the future in agriculture, how do you assess the union’s common agricultural policy?

CAP is going to be reformed but it is not clear now in what direction this reform will take the sector. It is understood that the subsidy system is going to be modernized so the amount of money farmers get from the EU is proportional to the area under cultivation, just like it is in Poland, instead to the type of farming, as it is in many EU countries. I hope that CAP will also address the issues of renewable energy because green energy is connected with farming.

The prices of food have been growing in recent years and are expected to grow in the years to come. What are the main factors conditioning the growth?

There are estimates that say that the number of people on Earth will reach 9 billion by 2050. And there are doubts whether there will be enough food to feed them all. It is because of the growing middle class populations in Asia.

They generate new demand for highly processed products, goods, and this includes food as well. So more and more food is exported to those countries which means that less food is available to people who can not pay for it.

Another issue is that connected with renewable energy. You need to grow plants that will fuel renewable energy plants so there is pressure to use farmland for fuel production instead of food or fodder production. This effects the prices of grain and livestock. So new consumer markets for food and new technologies in energy generation together create a global problem and one solution may be a global food subsidy

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program from the developed countries execute by international aid agencies.

It seems that genetically modified organisms may be the solution to the growing problems of food shortages as it once was in 1960s...

We as a bank are not engaged in any GMO projects. One of the problems with GMO is the lack of the acceptance by the public opinion. Generally it is believed that GMO is the same as the artificially stimulated growth of plants and animals that involves chemicals and drugs such as antibiotics. But those are two different things. GMO soy beans for instance, for years have been an important element of animal fodder, especially for poultry, because they are rich in proteins. There is not enough GMOfree soy in the world today to support the nutritious needs of all farm animals. One can look for substitutes to the GMO soy but even if there are such they are more expensive than the GMO soy and therefore make the final product more expensive which is contrary to what we need to achieve—more affordable and highly nutritious food.

How, therefore, except for renewable energy, farming in Poland can evolve to cut the final price of food products?

There has been an enormous progress in the farming sector in Poland in recent years. Farm owners and managers are university graduates with indepth knowledge of their business. They pioneer new forms of farming in Poland by creating farming cooperatives—production groups. The Polish farming was historically very focus on individual farms. But thins is changing. Production groups now comprise of different types of farmers who specialize in different areas of the entire value chain: fodder producers, animal farmers, processing plants. There are many incentives that production groups can tap into, which then effects the final product price. First, they can optimize their costs—production groups can get subsidies covering up to 50% of their production costs, and in the case of plant production up to 75%. Second, they can apply for government subsidies. Third they can negotiate better business deals with big processing firms.

BGŻ is an important partner for such production groups. If there are farmers who want to create a production group

and have investment needs, they will come to a bank who knows their business and has experience in it. Oftentimes, production groups are looking at big investment projects, ranging from PLN 20-30 million within 2-3 years.

They can not go to much smaller banks or banking cooperatives, because they do not have that kind of money.

The number of production groups is growing in Poland. The largest numbers operate in the plant production sector—fruits and vegetables. But there are over 100 poultry and pork production groups and the number is growing too. So, the areas at which BGŻ has a strategic look are investments in agriculture, renewable energy and production groups.

In general Polish companies have high risk aversion. Especially today, when the global economic crisis is at its peak, they abstain from investing even though they sit on a pile of cash. How in this context do you see Polish farmers?

Farmers are very good bank clients. First, because there is a strong drive to modernize which requires a lot of capital. So farming is capital intensive when you look at the investment side. But farmers are not afraid of taking credit lines. They have different psychology. They are not gamblers when it comes to investing but very careful players. They plan their investment projects immaculately because they attach a lot of emotional value to their trade, their land and their status. They pay their interest regularly and there are very little defaults in the agricultural sector. One reason for this is that farms are often family-run businesses and therefore the wellbeing of entire families depend on their farm’s success.

Because Polish farmers run their business in a family-centered fashion, our bank has seen a new market niche.

Recently, in cooperation with Concordia insurance company, we launched insurance products for our clients. They cover obligatory insurance of the property and the plantation, but also farmer’s civic liability, their farming equipment as well as life insurance. They can also insure their family members. This is really what counts to them. Now our clients can handle their financial and insurance business with one visit to our bank. They love it! ::

Defense industry

Beyond night vision Polish Market talks with Ryszard Kardasz,President of the Board of Bumar Soldier Joint Stock Company, a leading company of Bumar Soldier Group- a defense industry consortium, about innovative products in the defense sector, international markets, the prospects of the industry in time of global economic crisis and how Poland is catching up with the most innovative economies.

Along with assault capabilities there is more and more emphasis put on troops’ safety today. What can you say about Bumar Soldier product range when it comes to the enhancement of troops safety?

Innovation for safety and security of the population is the main theme of our business. That includes the safety of soldiers on the ground at different war theaters but also, in the case of law enforcement authorities who use our equipment, public safety.

When it comes to the troops on the ground, we facilitate their ability to see at night and in difficult weather conditions. Our night vision equipment comes in two ranges. The first range is for individual soldiers and comprises such pieces as binoculars, monoculars, googles, and weapon sights. Another range is dedicated to different types of vehicles including tanks, all types of armored vehicles and helicopters.

Along with night vision technology we offer thermal vision equipment.

This can be applied in many different visual conditions not necessarily when it is dark outside but in fog or rain and when you need to see objects from far away. It also enables soldiers to see in places with little natural light.

Again, our products come in two ranges: for individual soldiers and for vehicles. We can also combine night vision and thermal vision in one piece of equipment—a camera that has the capability of merging the pictures. This is an optimal proposition for vision systems in tanks, armored vehicles and helicopters, where the most accurate understanding of the terrain and the surrounding area is of critical importance.

W hat else do you have in your product offer?

Apart from night vision and thermal vision technologies we have a line of products that utilize laser technology.

2 /2012 :: polish market :: 27

Defense industry

Monocular MU-3

This technology is used in rangefinders which are an indispensable part of all fire control systems including those mounted on tanks, armored vehicles, warships and anti-aircraft guns. Our rangefinder can measure the distance to objects that are up to 10 kilometers away with the reading tolerance of 0.5 meter. A friend-foe recognition system can also be implemented in those devices which makes them a powerful and reliable military tool.

On the other hand we offer also laser warning systems named OBRA 3.

This system is mounted on tanks and armored vehicles. It works in sync with their smoke screen systems. When a laser beam is detected, which means the enemy has seen us, is actually taking aim at as and is about to launch a missile to hit us, OBRA 3 activates our smokescreen whereby we know we have to run for a shelter.

The modern war theater is utilizing IT and high-tech to optimize troops effectiveness. How do you respond to that trend?

Bumar Soldier is managing one of the most important defense projects in Poland today. Codenamed Tytan—the Soldier of the Future, the project aims at creating an intelligent information exchange network of which individual soldiers are integral parts. To make it work each soldier is equipped with a set of sensors, such as thermal vision, rangefinders and other that gather data and transit it to a higher level command center. It covers different types

28 :: polish market ::

2 /2012

of data including information about the soldier’s health status. This will allow command centers to optimize the use of troops on the ground. Along with combat, such system may also be applied for training. For instance, the data transmitted from individual soldiers to the command center, which is stored at a computer disk, may be retrieved later for soldier performance analyses.

flak jackets. Companies in our Group: Łucznik Radom, Zakłady Mechaniczne Tarnów and OBRSM Tarnów develop armament for the project. The network and IT aspects are handled by Bumar Elektronika together with WB Electronics. And I’m the project manager. We work hard because in March we will have a preliminary presentation of the system for the defense minister.

It looks like the modern soldier uniform has to be completely redesigned to accommodate all the electronics...

This is a complex piece of equipment indeed. It includes all types of sensors, data transmitters and receivers, battery units, all embedded in the flak jacket and other pieces of body armor and all in such a way that they do not limit the soldier’s movement.

How would you compare the Polish defense industry with that in Western Europe?

Western Europe has a very advanced defense industry. They are in fact international companies with the global reach and excellent products.

We have to compete with them which is a difficult task because for decades we had to rely on Soviet-era technology. But some significant progress has been made in recent years. For instance the Stalowa Wola works, which once produced Soviet-type howitzers, has developed their own howitzer platform which is much more advanced from what the company used to produce. So a progress can be made but of course it takes time.

How would you characterize the Tytan project? What are the key principles beneath the philosophy along with Tytan is being designed?

Tytan is a modular system, whereby all its parts are interchangeable elements. They fit other parts which lets you adjust the equipment to your specific needs. For instance at present the company Łucznik Radom produces modular firearms. You can mount a barrel you want on your machine gun.

You can add the butt depending on the type of mission you are taking your gun at. All the elements are in a box and all you have to do it to compose your gun. The same principle is applied in our night vision equipment. One box contains all the modules you need. For instance the MU 3 monocular contains modules which monocular can be put together as binoculars or a monocular attached to the helmet, or a weapon sight. A set of magnifying lenses goes with it so it is all very universal and can suit every type of mission and be used by the military as well as police and the law enforcement authorities and agencies.

What are other companies that take part in the Tytan project?

Bumar Soldier coordinates the entire project and is responsible for the delivery of vision and reconnaissance equipment. Another company of the Bumar Soldier Group, Maskpol, is working on the provision of body armor including helmets, gas masks and

With the economic crisis taking its toll in many parts of the world, most significantly Europe, how do you see the prospects of the defense industry in the coming years?

As long as there are military conflicts and the threats of military conflicts, the defense industry will be doing all right. If the economic crisis deepens in Europe, European countries may cut their defense expenditures because it is one of the easiest ways to safe money. But it is also one of the most difficult decisions to make because the defense industry does not only condition the defense potential of your country but also your country’s economic development. Advanced technologies and products, originally developed for the army, often find many applications outside of the defense sector and become best-selling products.

I have to say, however, that the Polish defense sector does not need to worry about cutting defense expenditures because by a parliamentary act defense expenditures in Poland are set at 1.95 of the country’s gross domestic product.

In addition, the army has been through a structural realignment whereby there is more money to spent on equipment

Defense industry upgrades and new equipment because the costs in other areas have been reduced. So, effectively the money that will go into new military equipment acquisition in 2012 will be significant.

While the economy has been flagging in Western Europe, the BRIC countries—Brasil, Russia, India and China—have been strong emerging markets. How do you see them visa-vis their defense needs.

India is a country that Bumar eyes with interest. In the past, because of ideological reasons India used to buy a lot of military equipment from the Soviet Russia. At the same time Poland was a part of the Soviet bloc and a significant producer of armament within the bloc. Our engineers and technicians have accumulated a lot of experience and expertise when it comes to the Soviet-era equipment. India, but also Egypt, Libya, Algeria, and Vietnam still have a lot of that equipment in service. We can upgrade it with modern night vision systems and other modern battlefield electronic systems. Among those countries India is the largest market and, due to the conflict with Pakistan, the country keeps its military machine relatively wellequipped. Today India is an open country and eyes defense producers everywhere. So there is a chance for us to become a significant provider of electronic system upgrades for Soviet-designed tanks such as T72 and other armament.

When it comes to Brazil, it is a raising economy with a big market that is already quite well developed. There may be some opportunities for us to cooperate in technology development rather than look for sales deals of our equipment.

China, in turn, is a closed market.

We can look for cooperation opportunities but that is all we can do now.

When it comes to Russia, it is a selfreliant market. Russia itself is an exporter of defense equipment so where we can look for opportunities is in technology development.

It is so because of our history. When Poland started its political and economic transformation in 1989 there was not enough focus on preserving and protecting high technologies. You have to remember that Poland had very well educated engineers and technicians. They were world-class at that time. The technology we had was obviously Soviet because as a part of the Soviet bloc we had no choice. But in the 1970s we bought some high tech from the West and developed it further. Had we been more aware of the importance of the technology we had we would not have blindly attached the economic principle to some of the companies that had those technologies but were not making profits at that time. Unfortunately some of those companies went bankrupt and their engineers went on to work for somebody else, often abroad. The knowhow was gone. The same companies reemerged later as privately-owned business producing building materials or aluminum wheel rims. In technological terms it was a regress but in economic terms it was a progress.

But in recent years we have progressed significantly and are catching up with the rest of the developed world. The Ministry of Science has a huge budget for supporting the development of innovative technologies. So

does the National Center for Research and Development. There are also the EU funds that Polish companies can tap into. Bumar Soldier, for instance, has been developing a unique project in aspherical optics which is financed from the EU funds. Also the F-16 offset deal with the US has helped to transfer some innovative technologies to Poland. So, when it comes to the innovative economy Poland has made a huge progress in recent years, although it may not be yet reflected in international innovation rankings.

Is there anything that you think impedes the progress?

A systemic solution that is missing in Poland is the link between the academic research and the business implementation of academic research results. It is a very complex process and such that inevitably leads to competing in the free market economy. For 50 years Polish companies were not part of the free market economy, their products were not present in the marketplace and therefore they could not win any share of the market. It is the beginning. We have to start from scratch. We have to show that we can be competitive and that our products are superior. We are getting closer to that level.

And I have to say that in night vision optics we are actually better than most world players. ::

Thermovision sight CTS-1 in action

Today’s defense industry is all about innovative technologies, such as you develop for the Tytan project.

Yet in many international innovation rankings, the Polish economy comes in the bottom positions. How would you explain that?

2 /2012 :: polish market :: 29

Agriculture/EXPOCHEM 2012

Cooperation is crucial‌ Is it legitimate to talk of the phenomenon of the chemical sector influencing agriculture in Poland?

Jerzy Majchrzak The chemical industry is regarded as providing for the needs of the whole economy, given that as much as almost 70% of the chemical production goes to other industries, and only about 30% reach consumers directly. One of the principal recipients is agriculture. It is commonly known that had it not been for mineral fertilizers and crop protection chemicals, the world’s population would never have exceeded one billion. Moreover, according to the EU Climate Package, renewable energy should account for 20% of the EU’s total energy consumption by 2020. Consequently, in Poland too, one of the main sources of the renewable energy must be agriculture. The necessity to ADVERTISEMENT

boost yields and improve their quality poses a new challenge to the Polish chemical industry. What is more, keeping with the sustainable development principles, the chemical industry has increasingly used biomass to manufacture various chemicals.

This manifests itself through some new projects that involve the use of biomass as a source of raw materials.

It is also worth mentioning the initiative launched by the major Polish chemical R&D institutes and assisted by the Polish Chamber of Chemical Industry (PIPC), that aims at establishing the strategic project of using biomass in the production of selected chemicals. An interesting venue to present new trends and potential

forms of cooperation between science, chemistry and agriculture will be the international fair and chemical industry conference EXPOCHEM 2012 in Katowice. One of the panel discussions will focus on new challenges common for the chemical industry, agriculture and forestry. Next year will see the coming into effect of numerous EU regulations related to the chemical sector, including the mandatory purchase of the carbon dioxide emissions rights. At the same time, agriculture provides currently the only effective way of using carbon dioxide, which makes the necessity to discuss further prospective forms of cooperation all the more urgent. I am convinced that the great number of participating companies, interesting thematic discussions dealing with major challenges ahead for the chemical industry and the implementation of new development strategies, coupled with the demonstration of the latest technological achievements, will ensure that the fair will contribute to the faster development of the chemical industry. ::

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Cooperation through partnership Polish Market talks with Jacek Janiszewski, founder and chairman of the Program Board of the Association for Integration and Cooperation, and the founder of the Economic Forum in Toruń.

as well as to deepen the region’s cooperation with other regions of Poland.

Last but not least, the forum works toward boosting Poland’s cooperation on the international level especially when it comes to the Eastern Partnership. The division between economy and politics is one of the most important educational goals at our meetings.

W hat is the main idea behind the Economic Forum?

The idea of the forum is to bring together political, social and economic goals of different political factions in Poland today. An important element of the forum is to deepen and broaden the cooperation between cities in the Kujawsko-Pomorskie region ADVERTISEMENT

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Th e Association for Integration and Cooperation is running the 19th edition of the Economic Forum in Toruń. How do you evaluate the achievements of the forum so far?

Each new edition of the forum attracts more participants from Poland and abroad, including in this number corporations. This makes me think that the Economic Forum in Toruń is an important event. The forum triggers heated discussions among the participants on the economy, finances, banking, foreign affairs, science, sports and culture. To be honest, the forum was a singular project that started several years ago and has developed until today. One of the most important achievements of the forum is that it has worked out a

set of demands which underline the need for action to trasform the Polish economy so it creates more competitive products.

Transborder economic ties is the main theme of the 2012 edition of the forum. What has led to such a theme?

This theme is in a way a response to the suggestions voiced by the participants of the latest economic forum. We continue this year the same topics but we discuss them in a new environment which took shape after the last parliamentary elections.

So we will discuss the economic opportunities of Poland on the international arena and work out the solutions for the years to come having in mind the fact that the current political situation is only the background for our discussions.

W hat conclusions do you anticipate this year?

The scope of topics this year is wide. It ranges from transborder systemic ties, through Eastern relations, to infrastructure and agriculture. We will also discuss issues concerning public-private partnership, the development of small and medium-sized companies as well as the threats and opportunities for their development.

The scope of our discussions this year is very broad, which lets me believe that we will not run out of topics for the future forums. ::

Real estate

Picture courtesy of Cushman & Wakefield

Developed by Ghelamco, Senator is a modern office building totaling over 24,500 sq.m spread over six floors. It is located at Bielańska Street, Warsaw

Getting higher Investors in commercial real estate will have a busy time this year

from EUR 580 million a year before.

According to commercial real estate specialist CBRE, the total area of rented office space in Warsaw equalled 573,000 sq. m., the highest ever.

Bogdan Sadecki

Warehouse The 2011 volume of investments in commercial real estate in Central and Eastern Europe surpassed the EUR 6 billion mark, according to market analyst Cushman & Wakefield. As compared to the 2010 data, investors significantly boosted their activity in five markets in the region from the EUR 2.9 billion mark in 2010.

Poland maintained its leading position in the region with EUR 2.5 billion in investment transactions across all segments of commercial real estate. Hungary, a much smaller market comparing to Poland, had a huge raise in transactions volume from EUR 250 million in 2010 to EUR 728 million last year. Romania, in turn, saw a rather moderate growth from EUR 241 million in 2010 to EUR 320 million in 2011. Slovakia, however, could boast about a more-than-healthy growth from EUR 53 million in 2010 to EUR 263 million in 2011.

Where does the money go?

As in 2010, investors kept their focus on retail property in 2011, although the share of retail in the overall

34 :: polish market ::

2 /2012

investment transactions dropped from 49% in 2010 to 40% the next year.

The office sector comprised 37% of all transactions in 2011 while warehouse facilities comprised 15%, a growth from 8% in 2010. Some 40% of the investment volume was generated by portfolio transactions including the largest deals made by Multi-Development, PPF, Europolis, VGP, TriGranit and Aviva. The best retail projects yielded 6% while warehouse 7.7%.

Office rents It is expected that office rents will continue to grow throughout 2012 in the largest markets in Poland. The Warsaw market commands the highest prices, including EUR 24-25 per sq. m. a month in the central business district, and EUR 15 outside. Wrocław and Kraków reach EUR 15-16 per sq. m. a month while Łódź EUR 11-13.

At present, the total area of 1 million sq. m. of office space is in the pipeline, including half of that number in Warsaw. In 2011 the total investment in the office sector reached EUR 800 million, a significant raise

According to Colliers International, 2011 was a good year for the warehouse sector with 380,000 sq. m. of space delivered to the market—a 40% raise vis-a-vis 2010. The biggest growth was seen in Upper Silesia, where the total area of modern warehouse reaches 6.8 million sq. m.

What will the future bring?

Experts say the demand for commercial real estate will continue at a relatively high level, especially in the retail and office sectors, where investors look for prime properties.

In the warehouse sector the market is also expected to improve. The volume of vacant space dropped as the demand surged.

The prospects are good for commercial retail, especially because Poland is being perceived by international investors as a „balanced” market politically and economically.

The growing affluence of Polish consumers attracts new brands and the best evidence of this are such brands as GAP, Foot Locker and Toy”R”Us which put their flags in the Polish turf last year. ::

Invest in Katowice Special Economic Zone The Katowice Special Economic Zone (KSEZ) provides unique conditions for industrial and BPO/ R&D investors. Located in Poland’s most investment-attractive southern region Silesia, KSEZ offers investors public aid in the form of CIT reliefs equaling 40-70% of investment costs or 2 years of labour costs. The tax reliefs granted to KSEZ investors are in keeping with EU law.

KSEZ is the leader among Poland’s 14 special economic zones with almost 200 investors on its territory. Jointly the zone’s operators have invested EUR 4 billion, providing around 47 thousand jobs.

UJAZD

Sites offered to investors: • • • •

1 ,000 hectares of land Plots from 0.5 to 200 hectares Plots adaptable to investor needs Close to main national and European transport routes, convenient access; water, power and gas supply, as well as sewage disposal • Class A office building in Katowice

KSEZ closed last year with a good result – twenty new investment projects to the tune of EUR 250 million, which will offer around thousand new jobs.

KSEZ investors speak very highly of the zone. According to a KPMG report for 2010 95% of firms operating in the Katowice Special Economic Zone are pleased or very pleased with their location.

Among the zone’s investors are Fiat GM Powertrain, GM Opel, Isuzu Motors, TRW Polska, Roca, Guardian, NGK Ceramics, Capgemini and Steria.

ZABRZE TUCZNAWA

KSEZ also offers a unique opportunity — plots exceeding 100 hectares: • Ujazd – over 200 hectares on the border between the Śląskie and Opolskie provinces, adjacent to the A4 motorway.

• Zabrze – 100 hectares, 4 kilometres from the A1 motorway.

• Tucznawa – over 100 hectares close to Dąbrowa Górnicza, 6 kilometres from the DK1 trunk road, 24 kilometres from the A4 motorway.

For more details: www.ksse.com.pl

Katowice Special Economic Zone Co. Poland 40-026 Katowice, 42 Wojewódzka St. tel. +48 32 251 07 36 ksse@ksse.com.pl • www.ksse.com.pl

Real estate

Back on track Retail is taking off, again.

Tomasz Ćwiok

Photo courtesy of Korczowa Dolina

Korczowa Dolina Retail Center in Młyny, Podkarpackie region, caters to Polish and Ukrainian customers

According to Jones Lang LaSalle, Poland maintained positive GDP growth through the global economic downturn. The 2011 growth reached 4.1%. This rate is now expected to slow down to 2.4% in 2012. Retail sales grew by 11.2% between January and November.

Sales were helped by the record high level of employment since 1992, which is due to the current demography i.e. baby boomers of the 1980’s entering the labour market in recent years. However, the eurozone debt crisis may adversely affect the unemployment rate and consumer confidence in 2012 and hamper retail sales growth.

Building, building When it comes to the supply side, Jones Lang LaSalle notes that 2011 brought a recovery in new retail provision compared to the previous year; new shopping centre floorspace which came to the market totaled 487,000 sq. m, up by 17%—a visible effect of the accelerating market after the slowdown. The total shopping centre stock now amounts to over 7.58 million sq. m. However, the final 2011 result was still lower than earlier forecasts, which is due to minor construction delays on some of the projects. Stock delivered last year was distributed over 17 new centers (80.5% size-wise) and 10 extensions to those already existing (19.5% size-wise).

Unlike in previous years, the share of GLA delivered in 8 major Polish cities accounted for only 25%, whereas the largest share was attributable to the smallest cities (with fewer

36 :: polish market ::

2 /2012

than 100 thousand inhabitants), which represented over 31% of the new stock.

According to Jones Lang LaSalle, some of the markets witnessed major reshuffling in their retail landscapes in 2011 caused by either first entry of modern retailing into the city, or a major quality shift.

Unsurprisingly, developers tend to concentrate on sites located within the built-up areas of Polish cities. New floorspace located within in-town developments constituted almost 53% of all shopping centre stock, followed by projects located on the edge of urban areas (36%) and those further afield (11%).

At the border There are notable examples, however. Kor­ czowa Dolina Retail Center, in Młyny, Podkarpacie region, only two kilometers away from the Korczowa check point on the Polish-Ukrainian border, comprises 15,000 sq.m. of retail, already commercialized. Tenants include Biedronka, Puma, Gatta, Domex, Yvonne Collection, Primastrada, Oksana, Drogeria Qlu, Lewanda drugstore, ElektroMax and Kros. The center caters to both Polish and Ukrainian customers—the latter can travel within 30 kilometers into Poland visafree. “We believe in this region,” says Robert Karczewski, President of Korczowa Dolina.

“Korczowa Dolina is where Western retailers can reach without having to cross any borders. Also, we did our own studies and expect a raise in Polish-Ukrainian trade and traffic following the Euro 2012 soccer championship.

So, being a pioneer involves some risks, but we are sure that our project will be a success.”

Karczewski plans to add a 20,000 sq. m. retail hall this year to the existing one, and another similarly big hall in 2013. When finished the shopping center will support some 500 jobs acting as one of the largest and original retail projects catering to both Poles and Ukrainians.

the risk of cannibalizing. Smaller tenants are often looking for franchising possibilities in order to diversify the risks of development in smaller cities.

While the demand for space in the largest cities remained stable, smaller markets and those highly saturated are being carefully examined by potential tenants, which has resulted in downward rental pressure observed on some markets. However, the best projects have high demand and long waiting lists and will avoid the drop in rental levels, although no upward trend is expected either.

Brands come in Almost 40 new international brands commenced operations on the Polish market in 2011, according to Jones Lang LaSalle. They represented numerous retail categories including DIY, Fashion, Shoes and Catering.

Most of the entrants chose Warsaw as their bridgehead to the country. The American Toys”R”Us chain opened their first store in Warsaw’s Blue City centre, Złote Tarasy welcomed UK’s Dorothy Perkins, while GAP and Foot Locker opened in Arkadia. The Swedish Jula handyman store began expansion with securing space in Inter IKEA retail parks in Warsaw and Wrocław. Spanish Desigual on the other hand opened their first three stores in outlet centres in Warsaw, Poznań and Kraków. The expansion of the Swedish Lindex is geography- driven: its first four stores were opened in the south of the country. Finally, Answear.com opened their first two bricks and mortar stores in the extended Galeria Echo in Kielce and Stary Browar in Poznań.

Poland is not Eastern Europe Jones Lang LaSalle notes that the market may also see the commencement of new significant projects going forward, although one must bear in mind the current economic turmoil in Europe. Against this backdrop, it is difficult to predict what the attitude of developers and banks will be in 2012. However, recent years showed the resilience of the Polish economy, which is now more frequently perceived as separate from the rest of the CEE basket. ::

Being selective On the demand side, Jones Lang LaSalle notes that retailers continued their selective approach towards new projects in 2011. The pace of development of the largest anchors remained unchanged, however cautionary measures were applied in order to mitigate

While the demand for space in the largest cities remained stable, smaller markets and those highly saturated are being carefully examined by potential tenants, which has resulted in downward rental pressure observed on some markets.

Real estate

Still going strong Despite the economic slowdown in Western Europe, Poland’s industrial and logistics real estate markets are relatively stable.

quarter to quarter and by the end of the fourth quarter last year stood at approximately 12%. In 2012 we expect the vacancy rate to decline further as existing space is absorbed.

The already low rents in Poland have generally remained stable over the course of 2011 however during the last two quarters we have seen slight increases in effective rents in some locations where supply is now very limited. Although drastic rises are not predicted in the short-term, a continually falling vacancy rate will lead to upward pressure on rents in 2012 in certain locations.

Tom Listowski

Silesia on the rise Total modern stock continued to grow and by the close of the year reached the 7 million square-meter mark, which represents a 9% increase compared to the end of 2010.

Although Warsaw and the Greater Warsaw area combined is still the largest industrial and logistics hub in Poland, it was Upper

Stock by regions (sq.m) Warsaw Total Warsaw Inner City Warsaw Suburbs Central Poland Upper Silesia

Manufacturing space still hot Photo: Dorota Skowrońska

The industrial and logistics real estate market in Poland in 2011 was again very positive and continued to gain momentum.

During the first 6 months of the year takeup rose by 40% and the number of schemes under construction was nearly twice that of the corresponding period in 2010. By the end of 2011 approximately 1.9 million square meters of modern industrial space was transacted through new leases and renegotiations of existing agreements, which proves that Poland’s industrial and logistics market had recovered but more importantly also expanded, with tenant demand again proving strong.

Warsaw was the leading location in regards to leasing activity with take up recorded at well over 750,000 square meters, an increase of nearly 40% compared to the end of 2010. In regard to the regional cities, southern Poland, in particular Upper Silesia, also recorded significant leasing activity (approximately 370,000 square meters) followed by Poznań (200,000 square meters), Wrocław (220,000 square meters) and central Poland (190,000 square meters).

Silesia which recorded the highest amount of new stock coming onto the market, approximately 115,000 square meters or a 22% increase compared to figures recorded at the end of 2010.

With the majority of new stock coming onto the market being subject to a pre-let being secured, many developers are however using this as leverage to also add a speculative component to new phases of development where its construction is justified due to a limited supply of efficient space.

588 000 2 041 000 940 000

With the second half of 2011 being clouded by uncertainties in key economies within the European Union, Poland seems to be relatively well placed to continue to grow in 2012 which should have a positive impact on the industrial and logistics market. ::

The overall vacancy rate, which stood at approximately 15% at the start of 2011 declined

Author is a Partner, Head of Industrial in Poland & CEE Corporate Relations, Cushman & Wakefield

Stock under construction (sq.m)

Vacancy rate

Warsaw Total

778 000

Warsaw Total

96 000

Warsaw Total

17,3%

Warsaw Inner City

158 000

Warsaw Inner City

20 000

Warsaw Inner City

11.9%

Warsaw Suburbs

620 000

Warsaw Suburbs

76 000

Warsaw Suburbs

18.8%

Central Poland

190 000

Central Poland

49 000

Central Poland

10.4%

Upper Silesia

375 000

Upper Silesia

47 000

Upper Silesia

7.8%

Poznań

946 000

Poznań

199 000

Poznań

64 000

Poznań

3.9%

Wrocław

649 000

Wrocław

221 000

Wrocław

63 000

Wrocław

9.0%

Tricity

140 000

Tricity

59 000

Tricity

30 000

Tricity

10.8%

Kraków

116 000

Kraków

48 000

Kraków

19 000

Kraków

8.7%

Other regions

193 000

Other regions

28 000

Other regions

38 :: polish market ::

1 386 000

Good prospects

Less to rent

Take up by regions (sq.m) 2 629 000

Throughout 2011 we witnessed warehouse leasing activity from a diverse range of sectors including logistics, retailers, pharmaceuticals, FMCG and electronic appliances.

In addition, more and more manufacturing space requirements came to market, especially in the second half of 2011, which is a positive sign and proves that Poland is still a very attractive location for new investors looking to set up a production function in Poland.

2 /2012

0

Other regions

26.8%

Advertorial

Investment opportunities in the surroundings of PGE Arena Gdańsk The natural beauty of amber and Gdańsk’s centuries-long tradition as a seaport provided inspiration for the designers of PGE Gdańsk Arena. After just 2.5 years of construction and several months of operation, the stadium has already become a new symbol and showpiece of this coastal Polish city.

Apart from being a soccer pitch, PGE Arena is also a multi-functional and modern sports facility serving as a business, entertainment and recreation center. The stadium can be a venue for mass public events for 40,000-45,000 spectators, like soccer matches, concerts and other sports and cultural events. The place is also supposed to draw entrepreneurs and foster the development of business relations. For this purpose, the stadium is provided with a conference center, restaurant and corporate boxes leased to tenants for daily use.

The stadium has a well-developed infrastructure to enable it to function not only during mass public events. On the premises, there is a pub, T29 Bar, open to the public seven days a week. Apart from indulging in a wide variety of foods and drinks, clients can also watch matches and other sports events at the pub. Additionally, the stadium provides around 9,000 sq m of commercial space. Accessed from the outside, it is designated for a retail premises offering sporting goods and services. A 1,715 meters long professional roller skating track with automatic time measurement is a distinctive feature of PGE Arena. As it is connected to the city’s network of bicycle lanes, one can easily reach the stadium by bike or on roller skates. Parking facilities for around 1,900 passenger cars, and 160 buses and outside broadcast vans complement the stadium’s infrastructure. There are bus and tram stops in the vicinity of the stadium while a new stop for light rail trains, Gdańsk Stadion, will be completed in May 2012 at a distance of 350 meters from PGE Arena. Trains will be stopping there at a time of matches and other events.

The choice of location for the modern stadium, a very special project, was not accidental. PGE Arena Gdańsk is situated in the district of Gdańsk Letnica, at a distance of around 6 kilometers from the city center, 14 kilometers from the airport in Gdańsk

40 :: polish market ::

2 /2012

Rębiechowo and 3 kilometers from the harbor. Additionally, the distance from the stadium to the beach is around 1 kilometer as the crow flies.

The stadium has become a catalyst for the economic and social development of the Letnica district, which is now being revitalized.

The example of stadiums in Western Europe, like Amsterdam Arena and Stade de France, shows that if built in neglected districts this kind of facilities, coupled with a long-term vision for the development of their immediate surroundings, make it possible to completely change the character of the area. One such change is the Amber Expo exhibition and congress center under construction in the immediate vicinity of the stadium. Scheduled for completion in April 2012, it will be a new home for the Gdańsk international fairs.

Amber Expo is a multi-functional, modern and air-conditioned exhibition space covering 12,000 sq m. Its conference center is composed of four rooms able to accommodate a total of 1,130 people, a press center, restaurant and bar. The complex also includes a six-story office building with a total space of 4,400 sq m. A major part of the space has already been reserved, which shows that a project of this kind in a new location has a large potential.

After the UEFA Euro 2012 tournament, the stadium’s infrastructure will be further expanded. There are plans to develop a complex of buildings designated for hotel, recreation, sports or office functions. The final choice of functions will be made by investors themselves.

The site set aside for the new projects is part of the stadium property. It is located on Marynarki Polskiej Street, the thoroughfare leading to the stadium, and parallel to Słowackiego Expressway which is being built in the vicinity of the stadium. There is a parking lot on the site, with an access road from the thoroughfare. It may be used for the needs of future projects.

The stadium has already been completed but work to develop sports and recreation infrastructure, the neighborhood, and consequently the district of Letnica and this part of the city will continue. Many strategic road projects are now underway as part of preparations for the UEFA Euro 2012 soccer tournament. When completed, they will

completely change and streamline Gdańsk’s transport system.

Biuro Investycji Euro Gdańsk 2012 (BIEG2012) is a special-purpose company of the Gdańsk municipality set up under Sept.

7, 2007 law on preparing the final tournament of the UEFA Euro 2012 soccer championship (Journal of Laws, 2007, no. 173, item 1,219). The company is one of the owners of the stadium property.

The mission of BIEG2012 was to carry out the PGE Arena Gdańsk project and prepare the facility for operation. BIEG2012 is also responsible for managing the stadium property and commercializing the site where offices, hotels, and entertainment and recreation centers are to be developed. ::

The area is designated for commercial and public services, excluding: :: small business manufacturing, :: gas stations, :: automobile repair shops specializing in body repair and painting, :: service stations for trucks and buses.

Permissible use: :: parking lots and garages for passenger cars, :: car showrooms with service, :: small warehouses of up to 2,000 sq m, :: boarding houses, :: homes being an integral part of facilities used to conduct economic activity.

Function of the area: commercial and public services

Excluded function: :: retail premises with a retail space larger than 2,000 sq m, or a combined retail space larger than 100,000 sq m Building-to-land ratio: up to 90% Floor space index: up to 10.0 Building height: up to 30 meters Form of development: not specified Roof shape: not specified

Biuro Inwestycji Euro Gdańsk 2012 Sp. z o.o. ul. Pokoleń Lechii Gdańsk 1 PL 80-560 Gdańsk Tel.: 48 58 76 88 650 Fax: 48 58 76 88 651 e-mail:biuro@bieg2012.pl www.bieg2012.pl www.PGEarena.gdansk.pl

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The central part of the second metro line comprises 13 objects including 7 stations and 6 ventilation facilities. The line is 6.5 kilometers long.

One of its most complex elements is the junction with the existing metro line in the middle of a dense urban area, which makes the project even more complicated. It requires that the construction proceeds with special attention (so far over 400 explosives from the Second World War have been found plus the workers discovered an old factory under ground) and it requires redesigning a significant number of underground installations.

Installations and cables The second metro line is build through excavating. Each part of the construction is 200-300 meters long, 20-40 meters wide, and 35 meters deep.

Before each opening is complete, a plethora of pipes, cables and other pieces of underground infrastructure has to be taken away from the sides in such a fashion that the functions that they support are not interrupted. Because of that some 76 kilometers of power lines have to be replaced, 5.5 kilometers of sewage, 3 kilometers of heating pipes and some 5 kilometers of gas pipes. The scale of the project requires redesigning and rebuilding huge parts of underground infrastructure of the Warsaw city center and the Praga district.

Tunnel Boring Machines and metro cars

Metro 2.0 – new standard, new technologies The construction of the second line of the Warsaw metro has gone into the final phase. Installation systems are being fixed on all construction sites.

Drilling is scheduled to start soon in two separate points. At present the drilling company is building starting positions for two giant tunnel boring machines, each positioned two levels under the ground. The construction of the metro system is today the most complex and the largest investment project in Poland.

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The construction of the second metro line in Warsaw is not only about rebuilding the city infrastructure but also about new technologies. Tunnel boring machines equipped with earth pressure shields will be used for the first time in Warsaw. Each machine weights 800 tons and is 100 meters long. They will be simultaneously drilling and walling the tunnels progressing each day by 15 meters on the average (1-2 meters a day was the progress of the first metro line tunnel construction).

When the line is ready it will be serviced by modern and eco-friendly trains to be delivered by the consortium Siemens Polska, Siemens Austria and Newag. The trains will meet

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the newest standards in urban people transportation: open space inside, with room for handicapped people and the hot-button telecom allowing passengers talk to the crew. Warsaw Metro will operate 20 such trains in the second metro line, and 15 in the first line. The purchase, organized through a tender, is worth PLN 1,305 million. Warsaw Metro shoulders the cost of the transaction in cash, but also resorting to the EU funds and bank loans.

Going further with line 2 In light of the contract for the construction of the second line of the Warsaw metro, the the project should be delivered by the end of 2013. The total value of the project is PLN 4,170 million. The city of Warsaw is the main investor, with additional money coming from the EU. While the construction is in progress the Warsaw city council plans to extend the project by three stations going north east and west. The city has announced a competition for architectural and construction concepts for part one of the extensions. As many as 23 firms from Poland and abroad expressed interest in the project. ::

The project “2nd underground line in Warsaw – preparatory work, design and construction of the central section with the purchase of rolling stock” is co-financed by the European Union from the Cohesion Fund within the framework of Infrastructure and Environment Programme 2 /2012 :: polish market :: 43

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Ready to meet future challenges Jan Kuźmiński, president of MZA, the Warsaw city bus company, talks with Polish Market about how the company strives to serve the commuters in best possible ways.

The municipal bus company MZA Sp. z o.o. has the largest fleet of hybrid buses in Poland. What is the company’s strategy for the expansion of its fleet of environmentfriendly buses?

Indeed, for several months now we have had four Solaris Urbino Hybrid buses in our fleet. This number may seem small if compared with the total number of our buses but one should remember that until recently there were only three hybrid buses in Poland. We are happy to promote this type of fleet in the country. The first four buses will be used to conduct longer-term tests to check the cost-efficiency of the hybrids. It should be noted that hybrid buses are up to two times more expensive than conventional ones while MZA receives no subsidies and its investments have to be based on economic calculation.

One could think that the hybrids are the only environment-friendly buses in MZA’s fleet but the truth is that most of our buses meet very strict European Union norms. The newest vehicles are up to the EEV emissions standard, which is even stricter that the Euro 5 norm. This means that the buses MZA purchased in the past several years are almost as clean as gas-fuelled vehicles.

In 2011 MZA advertised what was called the “contract of the century,” Poland’s largest and one of Europe’s largest contracts for the delivery of buses. Was it just a one-time purchase or part of a long-term strategy?

Last year’s contract was indeed exceptional in terms of its size. We bought 168 very modern low-floor buses with a highly efficient air-conditioning system, electronic displays inside and outside the bus, a video surveillance system, an automatic fire extinguishing system and facilities for passengers with visual impairments, like buttons with Braille text and yellow areas at the exit from the vehicle. In terms of

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undertaking, one requiring efficient logistics. We have a reliable fleet in good working order able to transport large groups of passengers. Many drivers have received language training. There is a communications system with every bus, which will enable us to respond quickly and flexibly to any unexpected change. Euro 2012 is a big and prestigious challenge. But the experience we have from other mass public events, like for example the Pope’s visits, allows me to say that we will be able to provide a professional service for this largest sports event ever held in Poland.

Aren’t you afraid of anything, like for example fortuitous events of various kind?

For many months we have conducted rescue and evacuation exercises together with the municipal Security and Crisis Management Office, police, municipal police and other services.

the equipment range, our buses are in the top class in Europe.

Of course, the 2011 contract was not a one-time development. Since 2007 we have already bought 670 modern vehicles and have now invited tenders for the delivery of another 105 buses. Our goal is to bring the average age of MZA buses down to no more than six years.

But apart from that, you are taking other measures to benefit passengers.

The installation of ticket machines on our buses, to make it easier for passengers to buy tickets, is a large project we plan in conjunction with Mennica Polska SA. So far we have tested the machines in a few dozen vehicles and we want to provide another 1,000 buses with them by the UEFA Euro 2012 tournament in June. It will make a real change for both passengers and drivers, who now have to sell paper tickets.

Preparations for Euro 2012 will also be a big challenge.

I would like to assure everyone that we are fully prepared for this difficult

What other CSR projects are you pursuing now?

We are a transport company so it comes as no surprise that we invest in human capital. We have again funded awards in the competition for the best master’s thesis at the Faculty of Automotive and Construction Machinery Engineering Warsaw University of Technology. It is a special competition – its patrons are the rector of the university and deputy Prime Minister and Economy Minister Waldemar Pawlak.

Of course, we also conduct other CSR activities. We actively support the Great Orchestra of Christmas Charity, offering our busses for the needs of its volunteers. We also take part in campaigns held by local communities. Our buses transport disabled people to events of various kind free of charge. We support young athletes who come to Warsaw to take part in competitions. One should also mention the Public Transport Days, which we regularly help to organize. The event has already gained a national reputation and we are glad that our company is seen not only as a reliable carrier but also a partner offering attractive career opportunities.

Many young people who came to our first Public Transport Days now work with us. ::

Tourism

Hands across the oceans Polish Market talks with Rafał Szmytke, president of Polish Tourist Organization (POT), about the organization’s efforts to boost the incoming foreign tourism for Euro 2012 and beyond.

To trigger interest in Poland vis-a-vis the Euro 2012 soccer championship Polish Tourist Organization carries out the largest advertising campaign Poland has ever run across the main EU markets. What can you tell me about the advertising effort?

We have been pursuing a strategy for Poland devised in 2008. It is a very precise strategy based on market analysis looking at the tourist potential of each country. The campaign, which is targeted primarily at Germany, the UK and France, uses all media, from the Internet, through television, radio, to outdoor and special events. The total cost of the campaign is PLN 40 million. It is a big campaign because we compete with, among other events in 2012, the Summer Olympics in London. So, the closer to Euro 2012, which starts in June, the more intensive the campaign becomes.

Do you think that the Polish hotel sector is well prepared for such a massive event?

The Polish hotel sector is more than ready for Euro 2012. It is one of the most modern sectors in Europe today. Most of the hotels and spa centers have been built in the last 20 years so they comply with the newest standards in construction technology. Nearly all hotels run by international hotel chains in Warsaw are new. High-standard accommodation is often available in Poland for much more affordable prices than in other European countries.

The best reality-check of the Polish hotel industry took place recently when 13 out of 16 national soccer teams that take part in Euro 2012 picked their places to stay for the event in Poland. This includes some teams that are to play in Ukraine not in Poland. So, this is the best recommendation for the Polish hotel industry that I can think of right now.

How do you think the Polish tourism industry will benefit from the after-Euro 2012 effect?

We will have to wait and see the effect in a few years after the event. This year, for instance, the family tourism sector may not see as many incoming tourists as before because those who look for tranquility in Poland may be discouraged by the Euro 2012.

But along with our promotional campaigns

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types of campaigns and events. We also take part in trade events so more and more tourist catalogs in the US carry offers of trips to Poland. We have managed to increase the number of big catalogs which include Poland, which is a good measure of our success.

Also, we help regional tourist authorities benefit from trade events. For instance thanks to us a few years ago the city of Gdynia made its debut at luxury cruise fairs in the US and has been present there every year since then.

As a result, the number of luxury cruise ships that anchor at Gdynia in summer has multiplied and a new tourist industry emerged onshore. Each ship brings a couple thousand tourists who have to be taken care of at a time which is a huge business for the tour operators and all other related businesses in Gdynia, Gdańsk and Sopot.

for Poland and the Euro 2012 after-effect, there are other issues that come to play. For instance, the Russian market is very promising for Poland. Yet, Russian tourists need visas to visit the country and a smooth and efficient visa service is a must to maximize the profit here.

Euro 2012 is mainly about European tourism. But there are other promising markets as well. For instance, Poland’s national air carrier, PLL Lot has announced a plan to open a connection between Warsaw and Beijing. How do you see the potential for incoming tourism from this direction?

POT joins PLL Lot to help make this initiative a success. We will focus our promotional efforts for Poland on Beijing and Shanghai as those are the most promising markets.

Again, a good visa policy for Chinese tourists is a must to make the incoming tourism from this destination a success. We work with all the institutions concerned and hope this will be a success.

How about the US market?

The US is a very important market for us.

We target young Americans in selected locations such as New York through different

Poland is a part of the busiest tourist market of all continents. How do you work with other countries to maximize the inflow of tourism from outside of Europe?

We work with our counterparts in the Czech Republic, Slovakia and Hungry to promote all of our four countries as one diversified destination, Central Europe, vis-a-vis tourists who come to our region from the all long-haul destinations. Showcasing the combined offer from the four countries not only helps us maximize our promotional budget but makes sense to tourists who plan to visit different places in Europe. They get all the information they need to make the best of visiting our four countries. Sometimes they have no other choice but to travel in the region: for instance many air connections between Asia and Europe do not include Poland and therefore tourists from those destinations who want to visit Poland need to make itineraries including other countries and this is where our combined offer works for them. ::

The best reality-check of the Polish hotel industry took place recently when 13 out of 16 national soccer teams that take part in Euro 2012 picked their places to stay for the event in Poland.

Tourism

In search for a lasting impression Good execution of the Euro 2012 soccer championship is not enough to make the foreign soccer fans think of Poland as an interesting tourist destination.

Jan Sosna

Photo: P. Mamcarz, Courtesy of PL.2012

Modern sports arenas and transportation infrastructure may not be enough to make a lasting impressions on soccer fans, especially from Western Europe, who will come to Poland for the Euro 2012 tournament.

Following the 2008 decline in global tourism, the industry has been on a recovery path. Last year tourism generated some 980 million individual travels including 500 million in Europe, the world largest tourist market.

In 2011 Poland saw 13.2 million foreign tourists visiting the country mostly from Germany, Ukraine and Belarus. In terms of year-on-year growth in incoming tourism from individual countries, the top of the list belongs to Belarus, Russia and Ukraine with a 15% raise.

White spot on the map Yet, while the inflow of foreign tourism is on the raise, Poland’s regions and cities are nearly blank spots on the map of European tourist attractions among European tourism professionals, according to Jarosław Górski from Best Place—European Place Marketing Institute. Among positive associations with Poland they indicate Pope John Paul II and family values. The notion of “cold weather” dominates negative associations. Other associations with Poland which have no qualitative distinction include the fall of Communism, vodka and soccer. When it comes to personalities that foreigners associate

with Poland, Pope John Paul II tops the list, followed by composer Frederic Chopin, anti-communism leader and former president Lech Wałęsa, movie director Roman Polański, tennis player Agnieszka Radwańska, and ski jumper Adam Małysz.

The best known places in Poland, among foreigners, include Warsaw, Kraków, Poznań, Gdańsk and the Mazury lake area.

When it comes to the best known Polish brands, foreign tourism experts had a difficult time to name any. Only a handful could recall Lot airlines, PKP trains, and Wedel chocolate. In general, Poland’s export products were classified as “inexpensive food.”

In turn, when it comes to events, Poland was mainly associated with the Euro 2012 soccer championship, the World War 2 and the crash of the Polish presidential aircraft in 2010. Górski concluded that what tourism professionals know about Poland and how they perceive the country as a tourist destination is far away from what Poland should desire.

Taking the opportunity According to Andrzej Hulewicz, vicepresident at Mazurkas DMC Poland, a tour operator, there is not enough events of

international scope in Poland therefore the impact of Euro 2012 on shaping the international recognition of the country cannot be overestimated.

Hulewicz noted however that the financial benefits from the event, that the tourism industry hopes for, may be hard to get. First off, the event is ran according to the UEFA best practice including the business side. But the number of people who have already expressed interest in the event is overwhelming according to Hulewicz, who sees in it an immense opportunity to better the image of Poland internationally. “Had it not been for Euro 2012, we would not have such an opportunity to turn the visitors into the ambassadors for Poland,” Hulewicz said.

So the hope for the Euro aftereffect is huge. Along with the visitors, there will be viewers globally who will meet Poland on the television screen, in the press, and the interactive media. “There will be many opportunities to spread the good image of Poland globally,” Hulewicz said.

But for Hulewicz Euro 2012 is only the beginning of a chain of events that have to be created in Poland. He believes a skillful follow up on Euro 2012 is the way to go. “To improve Poland’s image we need to organize more events of international scope, be it sporting, political or cultural events,” he said.

Trying harder As Poland and Ukraine co-host the Euro 2012 soccer championship, many tourist professionals say, the tournament is an excellent opportunity for Poland to make a lasting impression on foreign soccer fans who will visit the country for the event. Having taken great memories of Poland back home, they will be likely to return as tourists. For Zbigniew Gajewski, director of European Forum for New Ideas, a think-tank, it may not be an easy task to utilize the event to the full. First, he says, soccer fans from richer countries are not going to be impressed by what they will see in Poland in terms of new infrastructure because “highways in Poland are not going to be superior to the highways in Germany or Italy”, neither the new stadiums built in Poland for the event will be as much breathtaking for foreign visitors from Western Europe.

Poland’s efforts in building the right infrastructure for the event will be noticed rather by the visitors from less developed countries, who will see Poland develop, but this will not be enough to change the way Poland is perceived internationally.

2 /2012 :: polish market :: 47

Tourism Gajewski said that in order to make a lasting impact on the visitors Poland has to enhance other aspects such as the proverbial Polish hospitality to show that Polish society is not so conservative to the point at which it has its back turned on the EU.

Serious tourism According to Janusz Majewski from the Poznań University of Life Sciences, the Polish Tourism Organization (POT), a government institution responsible for boosting tourism to Poland, has the right strategy. In its Marketing Strategy for Poland 2020, POT states that one of the selling points of Poland’s tourism

is “cultural tourism.” Explains Majewski: “It is not about agritourism. It is about serious tourism which is catering to specific groups such as people who love birdwatching in natural preserves.”

Majewski said that the inflow of serious tourism enthusiasts to Poland has been growing much faster than other types of tourism.

“Serious tourism should become an important element of Poland’s image,” he said.

Majewski noted that the Polish countryside is no longer associated with cheap and simplistic tourism. Quite the contrary, thanks to the stimuli from the EU through such programs as the Leader Local Action

Plan, theme-villages pop up vigorously. Spa centers that offer regional herbs as alternatives to the conventional beauty treatment slowly appear in Poland’s rural, ecologically clear areas. Educational farmhouses are becoming very popular with tourists and local entrepreneurs eyeing the concept with interest as well. Even UEFA has certified some rural landmarks in Poland for the Euro 2012 marketing purposes.

“If we manage to successfully sync Poland’s promo activities with the growing offer of cultural tourism, we will create a significant marketing edge for Poland,” Majewski concluded. ::

A budding industry The Polish Wellness & Spa sector has been growing too fast to keep industry standards. The best centers are few and far between.

Jan Sosna Although the Spa business has been blooming in recent years in Poland, the definition of spa is not clear as many hotels which advertise themselves as spa centers in fact offer accommodation and food combined with cosmetic services but no spa programs. “The Polish consumer perceives spas as luxury cosmetic parlors,” said Paweł Polka who runs industry websites Spa-info.pl and Spahotele.pl, and whose company Comfortum is the operator of Spa Prestige Awards, the biggest annual award for high-quality service. “Such understanding of spa set in in 2005-2008 when cosmetic companies successfully introduced their brands in the spa sector,” Polka said.

Last year when his team researched the market for the 6th edition of Spa Prestige Awards, they found out that of the approximately 1,000 businesses that refer to themselves as spa centers in their promo materials, only a little fraction meet the industry standards.

steam sauna, 25% tepidarium, 35% infrasauna,19% salt cave. When it comes to massaging, 81% of spas offer classic and oriental massage. Cryotherapy is available in 49% of spas, physiotherapy programs in 46%, acupuncture in 11%. Only 35% of spas have physicians in their teams.

When it comes to nice program supplements, 48% of spas offer fitness programs, 12% offer shiatsu, 13% yoga, 4% tai chi, while 29% have a tennis court within walking distance and 17% a golf course. The guests at 54% of spas may rent a bike, at 21% may practice horse riding and at 49% practice Nordic walking.

What’s in the offing?

As anywhere in the world, the Polish spas cater to all kinds of clients. Along with destination spas, which usually offer two-day programs crafted to the individual needs of the clients, thanks to the general well recognition of the Dr Irena Eris brand popular are cosmetic and medical spa centers. Femi spas,

which offer programs to women before and after childbirth, as well as Baby Spas, which accommodate families with young babies, are a relatively new thing. So are spas for newly wed (programs crafted for two) and holistic spa centers, the latter offering not only service but a knowledge about nature-friendly lifestyles.

Still new According to Polka, some 51% of Poles still do not know what “hotel Spa & Wellness” is.

Only 29% has the right answer.

When it comes to spa brands, most Poles recall Dr Irena Eris, Bryza Hotel, Spa Nałęczów and Hotel Gołębiewski. Those are the centers that are most frequented by foreigners. In 2011 as many as 300,000 foreign clients visited Poland’s spas.

On the other hand the limited knowledge of the spa business among Poles should not be a surprise: only 4% of Poles have stayed at least once at a spa. ::

The real stuff

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Hotel Golębiewski is among the best recognized Wellness & Spa brands in Poland

www.golebiewski.pl

The Polka team had to narrow down their research to 281 businesses that advertise as spas and have swimming pools, Jacuzzis, saunas, spa cosmetic services and bed and breakfast.

As much as 29% of all spas in Poland lie along the Baltic coast while 38% in the mountains in the southern parts of the country.

Only 66% of all spas, however, undergo the industry “star” rating.

When it comes to their services, 81% of spas have a jacuzzi, 78% Finish sauna, 65%

Tourism

Destination of choice Polish Presidency in the European Council gave a significant boost to tourist industry development.

Photo courtesy of the Ministry of Sports and Tourism

Janusz Turakiewicz

Deputy Sports and Tourism Minister Katarzyna Sobierajska speaking at the European Tourism Forum in Kraków last fall

Arranged under the auspices of the Polish Presidency of the European Council, the 2011 edition of the European Tourism Forum, an annual conference of tourism professionals, representatives of NGOs, local and central government officials, politicians and business people, took place in Kraków last fall.The leading theme of the forum was “Stimulating competitiveness in the European Tourism Sector”, a notion which is one of four priorities embraced by the European Commission in its communication issued in June 2010, entitled “Europe— the world’s number one tourist destination—new political framework for tourism in Europe”.

Speakers at the opening session of the conference included Katarzyna Sobierajska, deputy minister at the Ministry of Sports and Tourism, who said it is necessary to boost the areas of knowledge, innovation and new technologies in the tourism sector so it becomes more competitive.

In turn, Pedro Ortún, Director for Tourism, CSR and Consumer Goods at the European Commission, said the tourism industry should adopt a policy of corporate social responsibility and added the EU will embrace tourism-related issues in all its policies. Another speaker, Kent Nystrom, President of HOTREC, a pan-European confederation

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of national trade associations, who spoke on the behalf of the Network of European Private Entrepreneurs in the Tourism Sector (NET), said that the red tape and an overdose of legal regulations hamper the development of the tourism industry in Europe, which is especially harmful to small and medium-sized enterprises.

Marie Kihlberg Nelving, President of the European Trade Union Liaison Committee on Tourism, said the industry needs a wide access to vocational education, stable employment conditions for industry workers and a fair division of wealth across the industry that would be in sync with the European Trade Union Charter on Tourism.

The venue of the second day of the forum was the main building of the Jagiellonian University campus. Panelists discussed the importance of industryrelated knowledge generation and the development of innovative technologies for the tourism sector. Christopher Demunter, head of tourism statistics at Eurostat, ran a presentation entitled “The Use of Mobile Positioning Data for Tourism Statistics. “In turn, Prof. Ewa Dziedzic from the Warsaw School of Economics, delivered a lecture on “Consumer Attitudes and Tourism Satellite Accounts: The Polish Experience.” A plenary session on boosting competitiveness in the tourism sector followed.

Kata­rzyna Sobierajska, who talked to “Polish Market” during the conference, said that speakers’ presentations and discussions that followed helped industry leaders diagnose what kind of information is in demand by companies, what kind of information we have and how we can facilitate access to it for them. “The idea of the Virtual Observatory for Tourism as well as the the initiative dubbed IT and telecom technologies and tourism will help companies, especially in the small and mediumsized enterprise segment, access such information,” Sobieraj­ska said. Additional events at the conference included

mixers for representatives of European regions organized by Network of European Regions for Sustainable and Competitive Tourism and a presentation of the Best Practice Code in Sustainable and Eco-Friendly Development drafted by Travel Agent’s and Tour Operators Associations. Sobierajska said that an informal meeting of tourism ministers from the EU member states was another important development at the conference. “The ministers met to discuss how to promote Europe as a set of diversified tourism destinations and sell it globally especially in Brazil, Russia, India and China,” she said. “They agreed that there is a need to pursue an EU-level policy and expressed their support to the European Commission’s activities in this respect.”

Sobierajska concluded that the forum was an important event organized by the Polish Presidency of the European Council. She added that one of such important aspects was the signing of a cooperation agreement between the European Tourism Commission (ETC) and the European Commission in light of which ETC will play a more pivotal role in promotional activities set by the European Commission in a document entitled “Europe—the world’s number one tourist destination—new political framework for tourism in Europe”. Another important event was the signing of a cooperation agreement in tourism between Poland and Greece.

At the conference Poland also formally joined the 50,000 project, which aims to intensify tourist exchange in off peak months between the EU and South America. “The project starts in October 2012,” Sobierajska said. “It’s goal is to offset the negative effects of seasonality of tourist markets to boost new jobs in the tourism sector in Europe, reinforce Europe’s image as a tourist destination in South America and increase cooperation between the countries in the two continents. The first part of the program aims at selling Europe as a tourist destination to 25,000 travelers in Latin America between October 2012 and March 2013, and to sell Latin America as a tourist destination to 25,000 people in Europe between May and October 2013.” ::

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Tourism

Reality check With Euro 2012 only four months away Poland’s anticipated benefits are revisited.

Bogdan Sadecki with Tomasz Ćwiok The Euro 2012 soccer championship is one of the largest events organized by the UEFA. The Polish authorities did their best to prepare the country for the event co-hosted with Ukraine. Among the 219 investment projects undertaken by Poland, which include new sport areas, transportation infrastructure linking the host cities, extra processing capacity of the airports, train stations, and a host of other schemes, 83 projects are of strategic importance— without them the event could not be executed. The total cost of the preparation is estimated at PLN 96 billion.

Hoping for the best But it is an investment worth taking, is the universal understanding of the organizers. With the Euro 2012 media coverage across the continent and beyond, Poland will take the opportunity to present itself as an attractive country for all to see. In addition, thousands of foreign soccer fans who will travel to Poland, hopefully, will take away pleasant memories of the host country, which in time will act as the best recommendation for their friends to buy their next package holidays somewhere in Poland.

The question is, however, whether or not Poland’s initial strong confidence in seeing future benefits after Euro 2012 has enough merit.

First, the number of soccer fans who will come to Poland for the event, initially estimated at 800,000 to 1 million, has been recently corrected to 400,000-500,000.

It is also not certain where the fans will stay and how they will travel during the event. It is already clear that a significant part of fans from the Czech Republic will travel to see the matches of their national team in Wrocław and come back home the same day rather than stay in Wrocław.

The Irish fans are also a tricky business. The Irish national team stays in the coastal Tricity of Gdańsk, Gdynia and Sopot where they play one match.

They play two matches in Poznań in

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mid-western Poland. The Irish fans decided that they will need a strategic location to conveniently travel to Gdynia and Poznań, and picked the city of Toruń. The hotels in the city say they are fully booked around the time of Euro 2012 already.

The English team, in turn, picked Kraków for their stay. Kraków is known within the middle-income Britons as the best continental destination for stag parties. This, however, is not an image the Kraków city authorities are looking forward to seeing enhanced. Kraków would rather come back to its good and old image it saw forgotten after Poland’s entry into the EU, of the “cultural capital of Poland”. Anticipating the problem the city’s promotional agency has recently secured a significant amount of money to revitalize the old, more cherished picture.

Another problem is that the mighty infrastructural overhaul, which in fact is the biggest challenge in terms of costs and project management, and which is impressive to many Poles who have been waiting for years to see new highways, train stations and other modern pieces of infrastructure, is not going to make any big impression on visitors, especially from Western Europe. They have gotten accustomed to using modern infrastructure at home years ago.

The Warsaw effect?

The after-effect of a big sporting event on the host city— whereby the participants spread the good news about the place and, as a result, the incoming tourism to the place multiplies— was scientifically proved after the 1992 Summer Olympics in Spain. Dubbed the Barcelona effect, the phenomenon, Euro 2012 organizers hope, is going to work for Warsaw and other host cities in Poland. They estimate that for some 80% of all soccer fans who will visit Poland for the tournament, it will be their first time in the country. As a result, in 2013-2020 the number of foreign

tourists will be growing by some half a million a year. According to the estimates from the Euro 2012 organizer in Poland, PL.212, this will translate into the additional PLN 5 billion in 2012-2020 each year for the tourism sector in the country.

Some experts say it may be even more. According to the Tourism Institute, the average spending of a foreign tourist in Poland, which was USD 80 per day and USD 405 per person perstay, will be on the raise in the coming years.

Hoping for the best A year before Euro 2012 Poland launched a massive promotional effort across the European Union, targeting the markets in the UK, Germany and France. The campaign, supported by a range of central and local government institutions including the Ministry of Sports and Tourism, the Ministry of Foreign Affairs and the Ministry of Culture, the Polish Tourism Organization and the Adam Mickiewicz Institute, is now in full spin. The interactive leg of the campaign embraces websites where foreigners look for information about Poland. In France interactive ads were bought at travelgrove. fr, fr.lastminute.com, meteociel.fr, infotrafic.fr, and radiofrance.fr. German Internet users can find info about Poland and Euro 2012 at travel24.de, info-polen.com, it-news-world.de and frankfurter-magazine.de. The Englishspeaking client is targeted in Europe at travelandleisure.com, bedandbreakfast.com, tripadvisor.com, cheapair. com, lastminute.com, weather.com and mapsofworld.com.

When it comes to the television, Poland’s commercials appeared on BSkyB in the UK, channels 2, 3 and 5 of the French public television, Canal Plus, NRJ 12, NT1, T.F. 1, TMC and W9 in France, and Kabel 1, RTL, RTL2 SAT 1 and Vox in Germany.

The campaign was reinforced by events, including at big trade shows such as ITB 2011, ITB 2012 and WTM 2011, all big events for the tourism industry in Europe.

What will be the overall “after effect” of Euro 2012 for the Polish economy remains to be seen. One thing is certain: the closer it gets to the event, the more clear it becomes that the initial estimates of the benefits Poland will see because of Euro 2012, were too simplistic. ::

Tourism

Krasicki Hotel**** after conversion

by IPB

The world’s best hotel

Krasicki Hotel**** – a showpiece of a builder based in Iława The conversion of a section of the Warmia Bishops’ Castle complex in the northern Polish city of Lidzbark Warmiński into a modern, exclusive hotel was completed in 2011, just a year and a half after the start of construction works. The investor regards it as a world record that this neglected historical building was brought back to life within such a short time.

The hotel “rose like a phoenix from the ashes” and in January this year conquered London, winning an international hotel industry award. The general contractor on this special project was Iławskie Przedsiębiorstwo Budowlane IPB Sp. z o.o.

landscaping works. First, rubble was removed from the castle cellars. In this process, the builders found many artifacts, which were preserved and blended into the interior décor.

Difficult project

Ruins of the castle in Lidzbark Warmiński at the start of the conversion project, March 2010

The scope of works under the contract included restoration and archeological works, the renovation of wooden ceilings, and a wide range of construction and erection works from the foundations to the roof along with

“Converting the castle into a high-class hotel was a really difficult project,” says Andrzej Dowgiałło, president and owner of Anders Group, one of the hotel’s investors. “The successive archeological discoveries meant that our projects and plans were subject to constant change.

As a result, Iławskie Przedsiębiorstwo Budowlane, which undertook this task, had to show much flexibility and solidity. It was a unique project in Poland and its effect is exceptional. On the one hand, the castle has become a friendly

and enchanting place, on the other its historical potential has grown thanks to the discovery and reconstruction of many historical relics.”

Top specialists “The company has been present on the market for 45 years,” says Eugeniusz Jaremko, president of IPB. “We build apartments, retail premises, schools, hospitals, banks, and industrial, sports and tourist facilities. Generally, we specialize in complex and difficult construction projects, with short deadlines and high requirements from investors.

Among the projects which have become the company’s showpieces are the Mercedes showroom and the Alfa shopping center in the north-eastern city of Olsztyn, the sports and recreation center with a floor certified by the International Basketball Federation (FIBA) in the town of Susz, the Anders Hotel in Stare Jabłonki, the Miłomłyn Zdrój Hotel in Miłomłyn and the Krasicki Hotel**** in Lidzbark Warmiński.

IPB is the leading construction company in the region of Warmia and Mazuria, and winner of many prestigious regional and national awards, including the Polish Business Leader Gold Statuette, CSR Superbrand and European Medals. It is worth building with IPB as it stands for high reputation, reliability, credibility and confidence from customers. :: 2 /2012 :: polish market :: 53

Tourism

Time travel Historical battle reconstructions take in Jan Sosna

Kliczków Caste, with its annual knights’ party is raising on the charts of best historical events recreations

In recent years, the fields of Grunwald in north-east Poland, where in 1410 the joint knight forces of Poland and Lithuania delivered the final blow to the Teutonic Knights army in what is known as the First Battle of Tannenberg, have been seeing the recreation of what was one of the largest battles in Medieval Europe, performed by martial arts enthusiasts each July. In 2010 a record number—several thousands—of them banded at the Tannenberg fields to recreate the battle. The events attracted some 200,000 spectators; the battle itself was covered live by the Polish public television.

Sociological phenomenon While professional historians doubt whether such events do really reflect historical facts, live recreations of historic battles have become increasingly important tourist attractions in summer. It is estimated that the number of participants who each year take part in different reconstructions, ranging from medieval battles to WW2 episodes, to battles with the militia troops during the Marshall Law of 1981-83, has reached several thousand. The participants come in different ages, represent different professions and walks of life.

What characterizes them, however, is that they take pride in bringing to life glorious moments of their country’s or region’s or city’s history.

Sociologists explain the rapid development of this phenomenon with decades of Communism which suppressed any free expression of regional or national pride. It was not until after 1989 that Poles were free to demonstrate the achievements of their forefathers.

But instead of traditional celebrations, which are dull and often pathetic, Poles adopted some spectacular ways of having a good and memorable time—imagine the recreation of the 1920 battle of Warsaw with the use of cavalry, rifles, guns and armored vehicles.

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A cultural shift, sociologists say, has become reality. But along with the new tradition an industry has emerged.

Professional event organizers step in to make the events stick in the spectators’ memories as well as to impress the sponsors. Websites offering historical gear to suit different historical periods pop up. Individual recreation groups disseminate information about how to join them over the internet. The whole phenomenon is thriving.

Gem in the crown The recreation of the Battle of Tannenberg, apart from celebrating its historic significance, one of the few battles Poland actually won, has become the flagship event on the map of battle reconstructions. It attracts thousands of amateur actors who sport exact copies of historical armor, sleep in replicas of historical tents, do not use modern picnic gear such as gas ovens, canned food or modern plastic and glass bottles. It is estimated that the few thousand actors who took part in the 2010 recreation had spent some PLN 24 million on their gear, transportation and bed and breakfast at the side of Tannenberg.

But the event attracts thousands of hundreds of tourists catered to by a budding industry of sales people who offer food and drink as well as plenty of Middle-Ages related gadgets.

Tapping into the crowd The phenomenon of battle recreation is no longer the domain of private enthusiasts. Local government institutions successfully tap into the phenomenon to promote their local history. A concept that has been the most successful so far is that developed by the Museum of Warsaw Uprising, a state-owned institution which at its root has the unconventional presentation of history.

Into its footsteps followed the Archeological Museum in Biskupin, which not only is a replica of a Slavonic hamlet from 1,000 yeas ago, but holds regular events that reconstruct the daily life of early Slavs in which hundreds of

volunteer actors take part. They draw in the crowds.

In turn, organized by the Wolin local government, the Festival of Slavs and Vikings at the Wolin island, which last year saw its 20 anniversary, is one of the largest historical festivals of its kind in Europe with 2,000 participants from 26 countries the world over. The event comprises music shows, workshops on historic crafts, rites and traditions. It culminates with a battle of 500 men and is an excellent promo for the Wolin community. ::

Major battles and other historical events scheduled for 2012: April 27-29 - Fall of Tykocin, originally in 1657

May 1-2 - Knights’ Party, Kliczków May 4-6 - Siege of the Wisłoujście fortress

June 1-3 - Assault of the Zamość Fortress, originally 17th century

June 23-24 and July 12 - Gniew Castle hosts King Jan III Sobieski birthday party, 21st International Horsemen Knight Tournament with teams from Poland, France, Australia, Norway and Belgium; followed by the Battle of Gniew, originally in 1626 July 10-15 - the Battle of Tannenberg, originally 1410 August 3-5 - the Wolin Island, 28th Festival of Slavs and Vikings August 16 - Warsaw outskirts, the Battle of Ossów, originally 1920 September 1-2 - Racibórz hosts the 4th Racibórz Medieval Festival September 15-23 - the early Middle Ages festival in Biskupin Ethnographical Park September 15-16 - Battle of Socha­ czew, originally 1939 September 22 - Battle of Łomianki, near Warsaw, originally 1939 Setpember 29-30 - the Siege of the Modlin Fortress, (north of Warsaw), originally 1939.

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International relations

The Polish optimism

Selling Poland

Battling the global economic crisis may not be as difficult as universally believed

Photo by Wojciech Grzedziński

Ewelina Janczylik-Foryś

Polish President Bronisław Komorowski before a meeting at Davos

The 42nd Annual Meeting of the World Economic Forum which concluded last month in the Swiss winter resort of Davos, was used by the Polish delegation, headed by President Bronisław Komorowski, as an opportunity to disseminate good news about the Polish economy among 2,600 forum participants from over 100 countries.

Good vibrations Poland’s President Bronisław Komorowski came to Davos assisted by Marek Belka, president of Poland’s central bank NBP, and Ludwik Sobolewski, president of the Warsaw Stock Exchange. Despite the rather murky atmosphere at the forum, where politicians centered around discussing how to break away from the spin of the economic decline in Europe, the Polish delegation expressed a healthy dose of optimism, advertising their country as a good place to invest.

Speaking at a panel discussion devoted to “rebuilding Europe,” which was devoted to the murky problem of getting Europe out of the spin of

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a deepening economic crisis, President Komorowski said Poland has had a long experience in crisis busting. “We began our economic transformation 20 years ago when Poland was in a deep crisis, in fact in an economic demise,” he said. “We had to rebuild the country’s all social and economic systems and transform all aspects of public life to move from a totalitarian state to a democratic one.

The challenges that we all face today seem much easier to undertake. I’m sure we will succeed in tackling the economic crisis if we have enough determination to change.

Komorowski cautioned, however, that time is limited. “If Europe doesn’t improve fast,” he warned, “it will lose its position as an economic leader.”

Other panel speaker, who included Danish PM Helle Thorning-Schmidt, Finish PM Jyrki Katainen, and Irish PM Enda Kenny, stressed the need to stick by EU institutions during the crisis. “It’s not because we have Europe that we have this situation right now,” said Thorning-Schmidt. “It is because we have too little Europe.”

At a panel discussion organized by the Warsaw Stock Exchange, entitled “Poland—a World of Opportunities at Your Fingertips,” President Komorowski, speaking to the representatives of big investment banks, telecoms, insurance, IT, energy and business consulting agencies, said that despite economic turbulences in Europe Poland managed to maintain a healthy economic, political and social balance. “A year ago at Davos I said that Poland is a strong organism,” Komorowski said. “My optimistic predictions came true—Poland’s gross domestic product grew by over 4% in 2011, while the country’s budget deficit declined. Add to it the fact that the number of companies listed on the Warsaw Stock Exchange rose to 426 last year,” President Komorowski said.

The Polish President noted that while many countries today are looking for a solution to tame their growing deficits, Poland for years has had a constitutional provision which does not allow the country’s public debt to exceed 60% of the gross domestic product. “We have had this regulation for 15 years and it has worked,” Komorowski said.

This came in stark contrast with an earlier speech delivered by the British PM David Cameron, who said that when it comes to the pace of economic development Europe is clearly behind the rest of the world, a bad sign for the Old Continent in the global economy. Cameron noted that China managed to grow its economy by 8% GDP in 2011, while Africa by 5.5% GDP. Meanwhile the European Commission’s forecast for the EU aggregated growth in 2012 is 0.6% GDP and only on condition that the problems of the eurozone do not deepen.

Poland delivers At a separate meeting, organized by the Polish Treasury Ministry, President Komorowski met with the representatives of global financial institutions, debt issuers and the international investors community. He said that Poland is eyed with interest by the growing numbers of financial experts as the country has matured to the point in which it can embrace the needs of the world of business and international finance. ::

International relations

Many ways to tame the Chinese Dragon Polish Market talks with Jarosław Dąbrowski, managing partner and CEO of Dąbrowski Finance, a financial advisory, about the Chinese quest for more business in Europe and what it means for Poland

You were one of the business people who went with President Bronisław Komorowski to China last December. How significant was that visit from your point of view?

Dąbrowski: It was a good, highlevel visit. The Chinese were very open and President Komorowski did a great job. He met with his Chinese counterpart Hu Jintao, the Chinese prime minister, Wen Jiabao, and president of the Chinese Parliament U Bango. What is more, Poland and China signed strategic partnership, an agreement that along with Poland only seven countries in the European Union have with China. The partnership gives Poland a privileged position in relations with China. So when it comes to growing business relations between our countries Poland has taken the first step in the right direction.

Where do you think China, a global economic powerhouse, fits Poland, a relatively medium-scale economy in the global context?

Poland in recent years has generated good economic results and the country’s exports have been surging.

Poland’s internal consumption has been strong too. In turn, the Chinese economy, which has been doing well despite the global economic slowdown, has a huge production capacity which needs to be utilized. China’s largest trade partners, the European Union and the US, have seen their economies flagging. So the Chinese are looking for new business opportunities in medium-sized countries that so far have not been interesting enough for such a giant economy.

But this is changing. The Chinese are not only interested in trade but also in investments in such sectors are the power industry, banking and finance. They are looking for opportunities. For them Poland is interesting in three ways: as a consumer market, a market for big infrastructural

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International relations

projects, and as a gateway to the individuals markets of the European Union.

How do you think Poland can best utilize these three aspects?

We have signed a strategic partnership agreement but we have to bear in mind that in terms of bilateral trade we buy 10 times more from China than we sell to China. At the same time the level of Chinese investment in Poland is miniscule. Our strategic thinking should be aimed at cutting our trade deficit with China by promoting Polish exports to that country. On the other hand we have to promote investing in Poland vis-avis Chinese businesses. All this has to be done in sync with the expectations of the Chinese companies and trading partners.

So a partnership approach to China is what is going to count. Poland has to understand the Chinese point of view which is that Poland is a gateway to Europe. As a gateway it has to be always open and inviting. Poland has to take the risk of being such a gateway. The issue now is whether or not Poland is capable of having a consistent, long-term strategy to successfully play such a role.

The problem of foreign investment is a serous one. Today, when you look at the official statistics, in 2006-2011 China invested nearly USD 50 million in Poland. In Hungary, however, it is USD 380 million for the same period. The Bank of China has its regional office in Budapest, but not yet in Poland. What is significant, China has earmarked USD 1 billion credit line to support the development of the Chinese business in Hungary. There is no such instrument established to support investment in Poland yet. But Poland is a country which is in need of foreign direct investment. It is important that such capital, when invested in Poland, is productive for the Polish economy. Maybe Poland should attract the Chinese capital into the privatization of state-owned companies. Chinese investors should also be involved in creating new projects.

Then comes trade deficit with China. China sells ten times more to Poland than Poland to China. There have

to be strategies developed to accommodate that need. For instance, while China is a big manufacturer of goods, Poland can become a springboard for Chinese manufactures who sell in Europe if they relocate their assembly lines to Poland. For once, it is much cheaper to ship some goods in separate parts instead of the whole product. Secondly, for marketing reasons, products made in the UE may be selling better across the continents than products which the country of origin is China. Poland has proven itself as a good country for manufacturing.

So on the one hand Poland would act as the gateway to the EU for Chinese manufacturing companies and the country would benefit from business with China.

You have to remember that Chinese entrepreneur require a special approach on the part of their business partners. Poland will have to build some kind of infrastructure to embrace the development of business relations with China. One of the most important aspects of such a strategy will be to create an image of Poland as the best gateway to the EU markets for China.

W hat do you think about China-US relations today? It is more about competition or cooperation?

The US and China are in symbiosis today. We have to remember that China and the US used to have good business relations throughout the 19th century. It is not excluded that the history may repeat itself.

Over half of the Chinese foreign currency reserves are in dollar. On the other hand, however, the two countries are also competing with each other globally. Today the gravity of the global political dialogue has been shifting from the Transatlantic relations to the Pacific basin. If this takes place it will be a new opportunity for Europe—a rivalry there is an opportunity for us here.

Do you think that in the US may take the place of Europe as China’s main trading and business partner?

Unlike the US, a country that has civilizational and cultural roots in

Europe, the Chinese do not approach the Old Continent in an emotional way because they do not have any such emotional ties with Europe. China is very pragmatic. The country itself is spread over a very big landmass and over the course of history has managed to live on its own without links with the outside world. So now China reaches out to improve its economy and boost the living standards of its citizens. It is looking for new markets to match its production capacity. We will have to wait and see how this will affect the global political scene in 30-50 years. A growing economic power always adjusts its international policies to effectively protect its growing interests.

But long as the European Union is an interesting partner for China in such fields as technology, economy, and the creation of intellectual property, Europe will maintain China’s number one trading partner. Plus Europe is interesting for China because Europe is a sleeping economic giant.

Separate European countries have their separate interests and therefore they can not protect their interest as effectively as they could have done had they worked as one. This also counts for China. ::

Poland’s strategic thinking should be aimed at cutting our trade deficit with China by promoting Polish exports to that country. On the other hand we have to promote incoming investment in Poland vis-a-vis Chinese businesses. All this has to be done in sync with the expectations of the Chinese companies and trading partners.

2 /2012 :: polish market :: 59

International relations

A new kid in town Chinese companies in Poland get legal services they deserve.

Ewelina Janczylik-Foryś Monika Hałupczak, partner of Yingke Varnai BWHS and Mei Xiang Grong, managing director Yingke

The Yingke team

Linda Yang (Director of International Department at Yingke law firm) Mei Xiang Grong, managing director Yingke and Monika Hałupczak, partner of Yingke Varnai BWHS The Yingke press conference

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Yingke Varnai, the second-largest Chinese law firm, put its flag in the Polish turf with the opening of the Warsaw office last month. Its Polish partner is Bartkowiak, Wojciechowski, Hałupczak, Springer law firm. In Poland the new firm uses the name of Yingke Varnai BWHS. According to Mei Xiang Grong, managing director Yingke Polska, the emergence of the law firm in Poland underlines the growing importance China applies to the market in Poland.

“There are many firms which made a successful entry into the market in Poland,” Mei Xiang Grong said, citing such names as TLC Operations, Huawei Technologies and Shengli Technologies.

The firm‘s fields of expertise include energy, IT, environmental protection, agriculture and food production, all sectors in which Chinese companies that invest outside of the country get the support of the Chinese government through a program stimulating the international expansion of selected Chinese companies.

Yingke Varnai entered the program in 2010. Twenty other law firms globally are partners of Yingke Varnai in this program.

With the establishment of Yingke Varnai BWHS presence in Poland the business community will deepen the understanding of the Chinese legal system by Polish entrepreneurs while Chinese firms interested in trade with or investment in Poland will find the firm an on-site partner.

“There is a number of reasons for the opening of a new office in Poland,” said Rupert Varnai, global partner of Yingke Varnai, who until recently managed the law firm’s Budapest office. “As a member of the European Union, Poland has become a regional leader for Central and Eastern Europe. Investing in Poland has become an important element of global investment strategies of many Chinese companies.” Varnai added that with the economic recession taking

its toll in many places the world over, Poland remains a place with a significant room for a further, dynamic business growth.

Varnai also said that along with Poland the law firm eyes such Central and Eastern European markets as the Czech Republic, Romania, Bulgaria and Ukraine.

In turn, Monika Hałupczak, partner of Yingke Varnai BWHS said that having manned the Warsaw office already, the law firm is working toward the opening of two more offices, in Gdańsk and Poznań. She said that the firm’s Warsaw office employs 20 lawyers and tax advisors.

Yingke Varnai employs 1,600 lawyers in 14 countries and its offices are in New York, Verona, London, Budapest and Taiwan.

The law firm has taken the advantage of the “coming out” program, sponsored by the Chinese government which aims at utilizing the potential of the Chinese economy abroad. The program does not only aim at boosting Chinese foreign trade but also to help Chinese investors abroad.

The appearance of Yingke Varnai in Poland is a good sign for Chinese investors, who so far were rather unfortunate in dealing with legal disputes in Poland. The best-know example is that of COVEC, a subsidiary of China Railway Group, which won the contract to build a 49-kilometer stretch of highway in Poland in 2009. It was the biggest contract a Chinese company had ever won in Europe, but it was challenged in court by the road administration, Polish General Directorate for National Roads and Motorways, who sued COVEC for dumping prices in the paperwork the company submitted to the tender process. The company lost the contract in effect. ::

With the establishment of Yingke Varnai BWHS presence in Poland the business community will deepen the understanding of the Chinese legal system by Polish entrepreneurs while Chinese firms interested in trade with or investment in Poland will find the firm an on-site partner.

International relations

The course prepares for working and conducting business operations on international markets, especially in China. Among our lecturers are specialists from China and business practitioners with great experience in relations with China.

From China with love Maria Bernat, director of Confucius Institute in Opole, talks to Polish Market about the institute’s mission and the growing importance of understanding China

Prof. Maria Bernat, director of Confucius Institute in Opole

The Confucius Institute was set up three years ago as a product of cooperation between the Opole University of Technology and Beijing University of Technology. Does the institute attract much interest?

Indeed. We offer a full range of services – from postgraduate courses to cultural events and the promotion of the Chinese language. The perception of China is changing thanks to our intensive activity, especially among our course participants, who have an opportunity to get to know China and the Chinese culture. The events we organize and the direct contact the institute enables are helpful in overcoming stereotyped views of China.

Has this interest grown in the past several years?

It has. There are now more people learning Chinese and more people going to China with the help of the institute. We now have 10 students on grants in China. In all, almost 30 students have so far taken part in the program. Researchers have also benefited from scholarships to China, or have taken part in conferences in the country. The institute has organized four international conferences on economic, engineering and social topics.

We can say, then, that the institute is an instrument helping one

to get familiar with the Chinese culture.

Indeed, the institute provides an opportunity to get to know the Chinese culture and the Chinese language. And since the institute is attached to the Opole University of Technology, we are involved in scientific cooperation in the area of engineering and economics. We work closely with the Office of the Opole Province Board Chairman on issues regarding economic cooperation.

You want the Chinese to learn about Polish achievements in technology and engineering…

Of course. We exploit every opportunity to work with the Chinese.

Companies and organizations interested in taking part in trade fairs contact us and we try to present them the full range of opportunities.

Do companies interested in dealings with the Chinese send their staff to study at the university?

This is what we can see in the case of the post-graduate course in intercultural management. The course is attended by company staff and the curriculum is so constructed that the students learn about a wide range of economic, cultural and legal determinants that have an impact on the effectiveness of business operations in Asian economies.

What is the role of culture in economic life?

Culture is always an introduction to closer relations, including the economy. Obviously, cultural events are part of the visits by Chinese diplomats and officials working for various departments of the Chinese embassy, providing an excellent opportunity for people associated with the Office of the Opole Province Board Chairman and the Business Center Club to contact Chinese diplomats.

The fact that there are Confucius Institutes educating students—future managers and engineers—is only to our advantage. I think Polish entrepreneurs are also aware of that and train their staff to be able to deal with the Chinese.

W hat events are you going to organize in 2012?

First of all, we want to continue our postgraduate EU-China intercultural management course because it educates future staff prepared for dealings with Chinese business. The course is 50% funded by our parent organization Hanban. The mission of this non-profit organization controlled by the Chinese education ministry is to popularize Chinese culture and language. The course comprises over 200 hours of lectures, workshops and seminars. To be eligible to enter the course, students must hold a bachelor’s or master’s degree.

Our flagship event is the Chinese New Year. The highlight of the celebrations this year was a show by acrobats and musicians. Of course, we still run our language courses at different levels and of different intensity. We also plan to hold one of traditional Chinese performances. We try to promote Chinese culture in conjunction with various institutions. We are now working on a Night of Museums project and we know that Chinese art will be one of its topics. :: 2 /2012 :: polish market :: 61

Banking

Who will pay for risk in the banking sector?

Measures to make the banking system in Poland more crisis-resistant will spur heated discussions.

Prof. Małgorzata Zaleska

The author is a Member of the Management Board of the National Bank of Poland, Associate Professor in the Department of Banking of the Warsaw School of Economics, a Member of the Presidium of The Committee on Financial Sciences of the Polish Academy of Sciences.

As a result of the global economic crisis supervisory authorities began to change regulations governing bank’s prudency, while at the same time, governments began looking for new money sources in the banking sector.

Most of those policies are made under the banner of higher safety of the countries and their banking systems.

One solution recently put forward is a new levy of taxes imposed on banks in different forms ranging from fees, such as transaction fees, to special-purpose charges such as prudential charge. The monies collected this way are meant to aid national budgets and aid funds, sometimes called stabilization funds. Poland is no exception. In December the government motioned a new draft of the Bank Guarantee Fund (BGF) bill, an institution which secures the maximum level of compensation for retail and corporate bank clients in case their bank goes bust.

Where do we go?

In light of the proposed bill, the fund would continue to offer guarantees to the clients of commercial banks.

It would also continue to offer assistance to banks that face difficulties.

But additionally, the second function of the fund would be enhanced by a stabilization fund aimed at rendering an extra aid to banks if the need be. However, the new bill proposes changes in the BGF line of competency.

Whereas, as before, the BGF Council will be authorized to allocate money to the banks in need, the actual transfer of money will have to be okayed

by the finance minister. In practice it means that the role of the finance minister will embrace the function of a banks’ savior.

The proposed bill goes even further.

The cost of the new fund is to be shouldered by commercial banks, which means their retail clients. How much each bank will be obliged to pay to the fund is indirectly determined by the bank’s type, because the base of the payment is generally calculated based on the value of the bank’s assets minus the value of the bank’s own founds and guaranteed deposits up to the maximum amount under warranty which is the złoty equivalent of EUR 100,000. In light of those regulations, big retail banks will contribute relatively little money to the new fund, while banks that specialize in financing real estate transactions or the purchases of new cars, as well as banks that source their finances from interbanking lending, and also such that are financially aided by their mother banks, will shoulder the bulk part of the cost.

With this proposition it is clear to see the regulator’s intention to give preference to the traditional branch of banking that specializes in saving accounts and loans.

Much ado about nothing?

It is estimated that the new levy will result in PLN 80 million to PLN 1.7 billion channeled to the BGF. This is a lot of money which the banking sector will have to raise, which in turn, may lead to heated debates about whether

Poland’s central bank is an institution that has access to data which allow it to assess the systemic risks individual banks face. It has also a qualified workforce with the right experience and knowledge to properly assess the systemic risks at play and issue recommendations when it comes to both safety adjustments for banks as well as recommend the amount of money banks should pay to the Banking Guarantee Fund.

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or not the new regulation is a good idea. On the other hand, when it comes to how effective one can be with PLN 1.7 billion to aid banks in dire straits, the proposed bill may raise doubts.

The assets of Poland’s largest bank, PKO BP, reach over PLN 180 billion.

What is more, experts argue that in order to raise the estimated amounts for BGF, there is no need to change the BGF bill as the existing relations offer enough room to up the fees banks pay to the BGF.

Where is risk assessment?

As argued by the authors of the new draft, the new regulations are meant not only to modify the system, but stabilize the banking sector by preventing the so-called “banking panic”.

For banks the threat is systemic.

It is the sum total of their relations with other banks, the circumstances, parameters and instruments that come to play. Given the complexity of the system and its vital parameters it is essential to find out who is in the best position to assess the systemic risks in the case of individual banks and who has enough data and experience to make a proper decision. Beyond any doubt, the central bank, is an institution that has access to adequate market data. The bank also has qualified staff who have the right experience and knowledge to properly assess the systemic risks at play and issue recommendations when it comes to both safety adjustments as well as the amount of money banks should pay to the stabilization fund. To empower Poland’s central bank with such an authority, however, will require making some further amendments to the sector regulations. With this in mind it is safe to say that the reform of the BGF, in order to follow European and global trends, will have to go through a long and winding road. ::

Advertorial

All inclusive

Bank Pekao SA actively supports development of infrastructure for UEFA EURO 2012TM According to various estimates, organisation of UEFA EURO 2012TM in Poland is connected with investment expenditures ranging from 80 to 100 bln PLN (i.e. 20-25 bln eur). To make it possible for this biggest mass-scale event in the history of Poland to happen almost 250 different type infrastructural investments have been started in the whole country – from roads and motorways, through airports, hotels, bus and railway stations, to stadiums.

Thanks to its capital strength, Bank Pekao SA has become the key partner financing the major investments for UEFA EURO 2012TM.

Three out of four stadiums built with participation of Pekao SA UEFA EURO 2012TM will be held on four stadiums in Poland: in Gdańsk, Warsaw, Wrocław and Poznań. Bank Pekao SA was the sole arranger of financing for construction of PGE Arena in Gdańsk, which is considered the most beautiful sport arena of this Championship. The so-called forfaiting was applied in the case of this investment, i.e. purchase of receivables for as much as 380 mln PLN. Bank Pekao SA was the first bank in Poland to apply this innovative financing tool, rarely used on the Polish market so far, to finance a big-scale public investment.

The Bank has also its contribution in building the National Stadium in Warsaw where the opening match will be played on 9 June 2012. The constructor

was supported by way of a syndicated loan in the amount of 150 mln PLN.

Roads Bank Pekao SA has granted guarantees and loans to the top companies operating on the construction market, implementing the key road investments in Poland.

This included a credit limit up to 699 mln PLN for Budimex and the exposure worth 95 mln PLN under credit consortium for Stalexport Autostrada Małopolska SA. Bank Pekao SA also participates in the consortium which ensured financing for Autostrada Wielkopolska SA – the constructor and operator of one of the key motorways during UEFA EURO 2012TM, which will improve communication between Warsaw and Poznań. of this stadium, the company: ALPINE Construction Polska Sp. z o.o., used a revolving working capital loan up to 120 mln PLN which was provided by Bank Pekao SA. In the case of the stadium in Poznań, the participation of Bank Pekao SA was indirect and was based on supporting the city budget.

Five airports, three located in cities hosting UEFA EURO 2012TM Bank Pekao SA supported construction, development and modernisation of airports located in the cities that will host the participants of UEFA EURO 2012TM. All in all, in three host cities (Warszawa-Modlin, Poznań, Wrocław) the Bank has arranged financing worth over 500 mln PLN. The money will be invested in construction and modernisation of terminals, development of runways and taxiways for airplanes as well as other elements indispensable for effective operation of the airport.

City transport In connection with the football championship many municipal units have accelerated their investments in city infrastructure, e.g. modernisation of a rolling stock. Bank Pekao SA also actively participated in those ventures.

In Warsaw, the Bank was the sole arranger of bridge financing worth 220 mln PLN for the purchase of low-floor trams. In the case of Gdańsk, Bank Pekao SA arranged the bonds issue for the purchase of modern tram rolling stock for the amount of 220 mln PLN. In Wrocław, a similar initiative

Support “all inclusive” The Bank is executing a number of projects for clients operating in the hotel industry which are carried out mainly in the form of project finance. These investments are implemented by special purpose vehicles (SPV). Such type of funding depends on the profitability of the project, and the loan is repaid from the generated financial surpluses obtained in the course of business activity, and not from the rent of space.

The investments related to the hotel industry are financed in the form of an investment loan, mezzanine loan, and they are co-financed with the EU funds and funds from the European Investment Bank.

In connection with the investments carried out in the hotel sector clients can benefit from the Bank’s longterm investment loans, mezzanine loans and working capital loans for financing the VAT. In addition, we use the full cross-sell and up-sell, offering clients derivative transactions hedging against interest rate risk and foreign exchange risk, the products related to operation of a current account, electronic banking as well as other credit products.

We cooperate with the leading brands in hotel industry, such as InterContinental Hotels Group, Hilton Hotels Corporation, Louvre Hotels, Interferie, Best Western, Marriott and Accor.

By financing hotel investments we significantly support the development of this sector. Thanks to Bank Pekao SA the hotel accommodation increased by about 4100 rooms in Poland. :: 2 /2012 :: polish market :: 63

Law

Focus on Polish energy market Poland’s energy sector relies on indigenous coal while gas has a relatively small share-14%-in the Polish energy mix. This situation may change in the coming years for a variety of reasons.

Krzysztof Kwiecień

The Author represents Energy Law Department, Chałas & Partners Law Firm

The EU climate policy favors gas over other fossil fuels. The development of wind power requires intermittent base load source, which gas suits best. Moreover, Poland’s growing industry needs more gas. Despite the above mentioned factors, annual gas consumption remains flat in Poland due to immature midstream and downstream sectors, as well as the specific supply portfolio. The price of imported gas, linked to oil products, remains high. Nevertheless, the last few years brought prospects for a dramatic change of supply balance thanks to a possible growth of indigenous production. At the time being, Polish gas production at 4.3 billion cubic meters satisfies roughly one third of the country’s gas consumption. According to conservative estimations, Poland has a potential to produce several hundred billion cubic meters of unconventional gas from its reserves of shale and tight gas. All of a sudden, a group of international oil and gas companies have come to Poland and received exploration licences. The operation of these companies that have mastered cutting edge technologies is likely to change the Polish market substantially. In the last three years more than one hundred exploration licences have been granted in Poland. Although a new, stricter Geological and Mining Law came into force as of 1 January 2012, one can expect that the licensing process is to be continued in the coming years, when final rules on the taxation of hydrocarbon production profits are to be settled.

Midstream and downstream ­market developments The Polish downstream market is monopolised by incumbent PGNIG with its market share of 97%. Although ownership unbundling required by the EU law has taken place, the gas market remains relatively closed. In order to

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change the obsolete gas market structure the Polish natural gas transmission system operator (TSO) Gaz-System is planning to introduce a new market model, particularly the grid code, to accommodate virtual trading.

The purpose of TSO activities is to prepare the board game on which it is up to market participants to play. This requires the introduction of a new market-based mechanism for daily balancing, which would be the key to virtual trading as well as to changing capacity allocation and booking. According to these plans at the virtual point, in the early stages of development, dayahead trade - as a standardised product—would be possible. This would quickly be expanded upon to include intra-day dealing, which could be delivered two hours after execution. The smallest possible trade would be in a volume of 1MWh. The changes to the network codes alone will require the completion of the draft rules, market consultation, TSO amendments and finally, the approval of the President of the Energy Regulatory Authority.

Exchange ambitions Gaz-System is working closely with Poland’s power exchange PolPX, which plans to host a gas bourse when the market gets off the ground. The company not only plans to host a gas exchange and an auction platform, but also a site that would collate in one place the country’s transparency gas market data to comply with the EU’s REMIT legislation.This would include all consumption units with an annual demand of over 600GWh - or 55.7 mcm/year.

Supply matter The issue of where the tradable gas will come from continues to concern some market participants. Although last year brought new import capacities

on-stream (connection with the Czech system in Cieszyn, and the expansion of connection with the German system in Lasow) and the introduction of virtual reverse flow on the Yamal Pipeline in Mallnow, the Polish gas market remains relatively closed. The completion of the Świnoujście LNG terminal with an annual import capacity 75 billion cubic meters due in 2014 should finally open the market. Furthermore, Poland’s biggest gas utility has recently announced a draft of a gas release program which aims at boosting wholesale competition.

Investments at the time of changeable regulatory regime While quite a revolution on the gas market that took place in North America is likely to reoccur in Poland, unprecedented tenders for new production capacities in the Polish electricity sector were announced. There’s a genuine market need to build in Poland new, efficient generation capacity which will replace old, energy intensive units and will allow to satisfy a growing demand for energy. Tenders for projects worth EUR 12-14 billion have already been anounced with more to come, especially when the nuclear power station project carried by PGE reaches its FID. Legal regime, that is far from being ideal, is nowadays under reconstruction due to the obligation to fully implement the 3rd EU Liberalisation package. The Polish government announced in December 2011 drafts of three separate acts on gas, renewable energy, electricity and heat that are to replace the Energy Law of 10 April 1997 that is currently in force. These acts, if well balanced and structured, should lay a foundation for a market structure of the Polish energy sector, which seems to be a suitable and relatively secure place to invest during continuous turmoil in the financial markets. ::

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Law

Dispute resolution is here to stay There are many reasons why international businesses in Poland should resort to arbitration courts.

Maja Sujkowska

The author is the owner of the European Centre for Legal Consultations

While arbitration is slowly becoming a popular alternative to long and costly court proceedings in Poland, its application to international dispute resolution has come into the spotlight. There are many pros for companies to resort to arbitration in Poland to solve disputes with foreign partners. First, Polish courts are breaking at the seems under the volumes of cases they have to investigate and the wait-time for new cases to open is long. Second, a court case requires that the process is held within a strict, formal frame, which, again, is time consuming and costly. For instance, when foreigners are involved in court hearings, sworn translators are a must. Third, in an arbitration, the sides of the dispute have their say in picking up the arbiters. This mechanism is meant to ensure that all sides of the arbitration process know the arbiters are professionals who have a deep understanding of the case and other business aspects that evolve around it. Fourth, the parties to the arbitration process can proceed with reaching an agreement in a confidential fashion, and decide upon the law of the country which they will base their solutions at, the place of the arbitration and the language in which they will proceed.

What laws are taken into account?

Arbitration in Poland falls under the Civic Code. The code is comprised in its bulk of regulations that are binding from the time they were introduced and effectively became the law.

They, therefore, may be excluded from a dispute resolution if the sides of the arbitration process agree so. This is one of the pros of dispute resolution in Poland.

Generally the guidelines for dispute resolution are set in Art. 1184 of the Civic Code in light of which the sides may agree upon the way their case will be proceeded by the arbitration court. What is more, in light of Art. 1194 paragraph 1 of the Civic

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Code, the arbitration procedure may lead to a resolution based on a legal code that is adequate to the problem in question but also base on common rules and understanding what is right.

Right of outlook The basis for resorting to an arbitration court is a written agreement between the sides of the dispute. They can enter such an agreement before any problem appears, by agreeing to resolve future disputes that may arise in the course of their cooperation, in an arbitration court. In this clause they can also state which arbitration court will handle the case, or decide that such a decision will be taken only after a problem appears.

It is worth noting that if the sides do not agree on the arbitration court to handle their potential disputes, in light of Article 1169 paragraph 1 of the Civic Code, they will be able to agree on the number of arbiters who will form the arbitration panel to handle the case.

Saving time and money In light of Article 1189 paragraph 1 of the Civic Code, it is not necessary to have the hearing before the arbitration panel to conclude an arbitration procedure. The sides of a dispute can agree to proceed through an exchange of letters which cuts the cost of the process and the time it takes to reach the conclusion. Arbitration courts, just like common courts, can take into account all evidence that the sides produce. It is acceptable for an arbitration court to accept to agree with the sides of the dispute to either broaden the scope of evidence as well as to narrow it. In addition, the arbitration court, in the way it handles the evidence, is not bound by the Civic Code provisions governing the evidence. In practice, it means that the arbitration court is not under the obligation to attach more credibility to the evidence that comes in the form

of documents versus testimonies and the accounts of the witnesses.

Confidentiality Businesses that use innovative technology can significantly benefit from dispute resolution through arbitration because the process may be kept confidential from the beginning to the end. Unlike common courts which are bound by Article 9 of the Civic Code, arbitrary courts are not under the obligation to keep their proceeding open to the public. They may decide to keep their proceedings open to the public or limit access to their proceedings to only selected individuals. Most of arbitrary courts in Poland guarantee confidentiality.

Last but not least, arbitrary courts are not obliged to inform other institutions, such as the Police, the common court, the prosecutor, the tax and other authorities, about the circumstances of the case they examine.

Who handles dispute resolution There are quite a few arbitration courts in Poland to chose from.

Among the most established are that of the Polish Chamber of Commerce, the Central Arbitration Court in Warsaw, and the Arbitration Court of the Polish Employers’ Association Lewiatan. ::

The sides of a dispute can agree to proceed through an exchange of letters which cuts the cost of the arbitration process and the time it takes to reach the conclusion.

Law

At war over ACTA Photo by Grzegorz Rogiński/KPRM

ACTA spurs heated debates in Poland, PM Tusk backs out from the trade agreement Ewelina Janczylik-Foryś As the Polish ambassador in Tokyo signed the controversial Anti-Counterfeiting Trade Agreement in January, thousands of anti-ACTA protesters took to the streets the country over voicing their discontent. The rallies followed massive attacks on government websites. Among those “grounded” were the websites of the prime minister, the Parliament and the Ministry of Culture.

While the agreement was slammed by street protesters and the majority of internet users in Poland, lawyers and industry insiders are divided in their opinions. The opponents of ACTA say that if it becomes law it will suppress the freedom of thought sharing on the internet by enabling internet service providers to censorship the content and block it off from other users on the pretense of copyright protection. According to Wojciech Wiewiórowski, Poland’s Inspector for Personal Data Protection, Poland does not need ACTA to effectively protect copyrights because the country has already good regulations governing information exchange between law enforcement authorities in the European Union. The inspector also said that some provisions of ACTA may be in breach of the freedoms guaranteed by the Polish constitution.

Who needs ACTA? Jarosław Chałas, managing partner in Chałas and Partners law firm, said the Polish government should take notice that ACTA’s Article 9 is in breach of the EU Directive 2004/48/EC. “There are doubts as of ACTA’s compliance with the Polish Constitution too,” Chałas told Polish Market.

He also said that if ACTA becomes law in Poland it will impact the civic law by making it obligatory for the suspect to provide the evidence of innocence, instead of the owner of copy­righted material to provide the evidence of the breach of their rights. When it comes to the criminal code, Chałas noted, ACTA calls for resorting the application of

temporary measures against the suspects without giving them a chance to explain themselves. “This reminds me of the Communist state philosophy, the arrogance of power of the Orwellian proportions,” Chałas said.

“No artist is capable of protecting his or her own work alone on the internet because the evidence of the crime is dispersed and the suspects are hard to identify,” said Krzysztof Lewandow­ ski, a lawyer from Polish trade organization charged with the protection of copyrighted material ZAIiIKS. Mariusz Kaczmarek from FOTA, a copyright watchdog specializing in graphic material, did not agree with those who say ACTA breaches internet freedoms of individuals. “It is about being responsible for what you do online, which is the same as in real life,” he said. “I do not see a reason why the Internet should be excluded from that rule and treated as a special entity, something separate from the real life.”

Kaczmarek noted that today anyone can libel anyone online, or publish other illegal content, without facing legal responsibility for their deeds.

In order to take away such content from the public domain, a set of complex and time-consuming procedures has to be applied by the law enforcement authorities, which does not effectively protect the rights of those who may be harmed.

On the other hand, the wrongdoer can swiftly re-introduce illegal content online and continue to do harm, which leaves the harmed in an extremely disadvantageous position.”

Social dialogue All experts agree that regardless of how much ACTA impacts the Polish legal system, the latter has to be changed if ACTA is to be a binding law. With this, they point to the government, which they say, have neglected the social-­ dialogue principle in the first place.

According to Chałas, not only trade organizations that actually deal with

PM Donald Tusk said Poland may walk out of ACTA if the Parliament fails to ratify the agreement

copyright protection, such as ZAiKS, FOTA or STOART, but the representatives of other interest groups as well should voice their opinion.

Mariusz Budziński, partner at Chmaj and Partners Law Firm, said that Poland’s entry into ACTA, because of the agreement’s very general provisions, will impact the Polish legal system in two ways. “First, the positive effect for the owners of copyrighted material will be the coordination and unification of the rules governing the protection of intellectual property rights in Poland,” Budziński said. “On the other hand, however, some provisions of ACTA are not in sync with Polish regulations. Poland will have to change laws, which means the lawmakers will have to put the proposed regulations through the process of consulting with the public, a part of the social-dialogue mechanism mandated by the Constitution.”

Thinking twice As the doubts over ACTA have been mounting, Poland’s PM Donald Tusk has said that the government will review the agreement in all controversial points. He also said that while the document has been already signed by Poland, the Parliament may refuse to ratify it, which in practice will mean that ACTA will never become law. Experts say that this is probably what is going to happen, especially after Germany’s refusal to enter into the controversial agreement. ::

The opponents of ACTA say that if it becomes law it will suppress the freedom of thought sharing on the internet by enabling internet service providers to censorship the content and block it off from other users on the pretense of copyright protection.

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Exports

Selling abroad in an orchestrated fashion Polish Market talks with Mieczysław Twaróg, president of the Polish Exporters’ Association, about strategies that will help Poland double its exports by 2015.

from the central government and its related institutions to the local administration and agencies. Our goal is to have the Polish economy double its exports in 2008-2015.

With the global economic crisis in full swing, Polish exporters have to battle their way to reach foreign markets. Is this true?

Poland has a diverse stock of exportable goods. Polish exports in 2011 were worth over EUR 100 billion and generated 33% of Poland’s gross domestic product. More than 70% of the exports go to the EU markets. It is machinery, cars and other types of vehicles, chemicals, metallurgical products, agricultural products, textiles, furniture and wooden products. Even during the economic crisis demand for some of those products— especially food—is still unimpeded. In addition, the złoty/euro exchange rate works as an additional export-boosting factor because the złoty has weakened significantly against the euro. This makes the Polish labor force more cost-competitive when compared to other EU countries. This, in turn, makes manufacturing companies relocate their assembly lines from Western Europe to Poland, which contributes to the growth of Poland’s exports.

How does the association work to make the Polish economy more export-oriented?

In 2008 we submitted to the Ministries of the Economy, Agriculture and Foreign Affairs a document entitled The Pro-Export Strategy for the Polish Economy 2015. We all know that exports are equally important as the domestic market in driving the economy. But because everybody knows that, the importance of that notion is often overlooked in policymaking. We make sure that it is taken into account on every level we can reach,

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W hat are the main recommendations made in this report?

To have good pro-export policies we need to know what branches of the economy as well as export markets should be of strategic importance. Focusing on exporting all goods to all countries leads to the dispersion of government funds earmarked for the promotion of exports. Our recommendations include such industries as automotive, electronics, aircraft, biotech, IT, telecom, and business services, research and development as well as the food industry. In turn, when it comes to geographic destinations that Polish exporters should focus on these are the EU market, Russia, Ukraine and Belarus, followed by the US, Japan, China, India, Indonesia, Malaysia, and also such countries as Iran, Thailand, Saudi Arabia, Algeria, Morocco, South Africa, Brazil, Argentina, Mexico and Chile.

Next, we need to reform the export supporting promotional system to effectively coordinate all promotional activities. Along with the Export Development Council, which works under the auspices of the Ministry of the Economy, and the Export Development Agency, which is supervised by the Ministry of the Economy, we need a new institution, a Polish export-import bank, which would facilitate the financial side of exporters’ operations, based on the state-owned bank BGK and the export credit insurance company KUKE. In our opinion, KUKE’s competencies should be extended to embrace the investment projects that Polish companies carry out abroad.

Our propositions call for the creation of new aid instruments that would exclusively support the exports of innovative products to selected markets. We also propose a revision of interest rates on loans taken by

exporters so they would have an easier access to such credit lines and transaction underwriting services. We also call for a more export-oriented utilization of the EU funding available in the 2007-2013 financial perspective through the Innovative Economy Operational Program.

Another important part of the overall promotional strategies are the economic and trade departments of the Polish embassies the world over. They are especially helpful to exporters among small and medium-sized companies who try to win trading partners for the first time. Although many companies have positive experiences in cooperating with the economic and trade departments it is clear that in some countries they need higher budgets and bigger staff.

This is especially true in the case of the countries that have strategic importance for Polish exporters.

Last but not least, we opt for the liberalization of the requirements governing the establishment of new business in Poland, easing up the tax regime, cutting the red tape when it comes to obtaining licenses and permissions, making the employment regulations more liberal and the overall red tape less time-consuming for companies.

How do you work among your members to get the best ideas and work out the best strategies?

The association has over 300 member companies in all industries and all Poland’s regions. They cooperate with over 5,000 trading partners the world over. They share their knowledge and experience in workgroups, committees and at special events.

In February we held the 10th Conference of the Polish Exporters’ Association. In June we will hold the 7th Program Conference, while the 10th Congress of Polish Exporters will take place in November. The congress will be devoted to discussing the problems of Polish exporters associated with the global economic crisis. ::

Economy

Unemployment and frictions on the labor market Unemployment is perceived as the plague of the contemporary world. Despite the civilizational advancement, there is no country that would successfully solve the problem of unemployment. Even the most detailed statistics cannot express the human suffering and social harm that unemployment produces. Regardless of that, the quantitative aspect of the phenomenon speaks volumes. According to the estimates of the International Labor Organization there are some 200 million people registered as unemployed the world over. It illustrates the scope of benefits that are lost—the welfare of the world and individual countries depends on labor. It is labor which produces progress, and is one of the main indicators of the sense and joy of life.

Elżbieta Mączyńska

The author, along with two other economists, Peter A. Diamond and Dal T. Mortensen, won the 2010 Nobel Prize in economics for their analysis of markets with search frictions.

Markets with search frictions is the fundamental term in the research.

Friction expresses the notion of the costly process of job searching and how the demand and the supply sides adjust. The matching theory as well as the search and matching theory, that were applied in the research, led to the creation of a group of models of how labor markets function. The models, dubbed Diamond-Mortensen-Pissarides (DMP) are useful tools for analyzing how jobs are created and liquidated, how people search for work and companies search for

workers, including the time and money it takes.

Pissarides presents, through mathematic formulas, the interactions in the labor market in jobmatching, showing that the classic theoretical interpretations of those processes do not match the reality.

This, in turn, may lead to the creation of wrong social policies and dysfunctional laws, such as a labor law which is too liberal for the employers and too restrictive for the employees.

In both cases, instead of rationalizing the labor market, bad laws may lead to the growth of unemployment. Pissardes, based on mathematic modeling, proves that there are such combinations of economic policies which do not disturb the labor market even in the markets with unemployment insurance. It also explains why there is unemployment event when there are vacant jobs. It, therefore, underlines the impact that lawmakers have on the unemployment through labor market regulations and economic policies they make.

This is why the book should be of interest to not only labor market theoreticians, but practitioners as well, but above all to the policymakers. It is a book I strongly recommend. ::

The author is the President of Polish Economic Society

www.ksiazkiekonomiczne.pl

It is by no accident that the unemployment rate, along with the inflation rate, is one of the two indicators of the misery index by Arthur Okun. This indicator is also used as the measure of political discomfort.

All that suggests that labor market research is important. It helps find the factors thanks to which some countries can successfully deal with unemployment while others fail.

Those issues are addressed in the book Equilibrium Unemployment Theory by Christopher Antoniou Pissarides, recently published in Polish by the Polish Economic Society.

Christopher A. Pissarides Equilibrium Unemployment Theory, Polskie Towarzystwo Ekonomiczne, Warszawa 2012

2 /2012 :: polish market :: 71

Cultural Monitor

Venerated poet dies Szymborska receives the Order of the White Eagle, from Polish President Bronisław Komorowski

All that

jazz

Picture courtesy of the President’s Office

Poet Wisława Szymborska, who won the 1996 Nobel Prize in Literature, died on February 1. Her poems appeared in translation in 42 languages worldwide. According to The New York Times, Szymborska was popular in Poland, but she was little known abroad because her poems were clear in topic and language, but her playfulness and tendency to invent words made her work hard to translate. ::

Era Jazz Festival will kick off in the Palladium Theater in Warsaw in April. The Medeski Martin Wood trio will be one of the frontline attractions, good news for the lovers of all forms of modern jazz, said festival director Dio­ nizy Piątkowski. :: Photo courtesy of Era Jazzu

Transition in pictures Polish political, economic and social transition since 1989 is exposed in pictures at Warsaw’s Center for Contemporary Art Ujazdowski Castle. The works of Anna Beata Bohdziewicz, Chris Niedenthal, Tomasz Tomaszewski, Wojciech Wieteska and others show many faces of the Polish transformation and a country in search for a new identity, somewhere between “real socialism and free-market capitalism”. ::

Recommendations from culture section editor Maciej Proliński cinema

Photo courtesy of Dom Spotkań z Historią

Rose by Wojciech Smarzowski, is a moving love story set right after World War II in ethnically diverse region of Mazury.

More than meets the eye

music

The prince of the Polish press photography Aleksan­ der Jałosiński, puts 150 works on show at culture center Dom Spotkań z Historią in Warsaw in May. The pictures are not only a great witness to the times gone by but give a lot of professional hints to press photographers as well. ::

The songs of the Canadian bard Leonard Cohen are no longer depressing on jazz singer Lora Szafran’s new album from Sony Music Polska.

Krzysztof Komeda’s live shows recorded at Warsaw’s Jazz Jamboree in 1961–1967 give

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more than a thrill to the fans of the jazz icon.

Issued by the Polskie Nagrania label.

theater Halka, written by the father of the Polish opera, Stanisław Monuszko in the 1800s, is a new offering from the Grand Theater—National Opera. Director Natalia Kor­ czakowska, offers a fresh take on Halka’s love affair. The orchestra is led by French conductor Marc Minkowski. ::

Cultural Monitor When symphonist meets rocker

Wacko at the opera

The collaboration of composer Krzysztof Pen­ derecki and rock guitarist Jonny Greenwood, initiated at the European Congress of Culture in Wrocław last year, resulted in an album featuring a compilation of Penderecki’s pieces that took him to modern music stardom, such as Polymorphia and Threnody for the Victims of Hiroshima and Greenwood memorable pieces such as Popcorn Superhet Receiver and Responses to Polymorphia. The two stars worked with a little help from the Akusto chamber orchestra and its conductor Marek Moś. ::

Marek Koterski, who made a name for himself with a series of movies about crazy, socially disconnected characters, saw one of them, Day of the Wacko, turned into an opera, thanks to composer Hadrian Filip Tabęcki and director Igor Gorzkowski. The premiere took place in the Poznań Opera, in late January. The libretto contains some of the best known and loved quips from the original movie. ::

Picture courtesy of Opera Poznańska

Two as one Pianist maverick, Rafał Blechacz, has made his fourth record with Deutsche Grammophone, this time rendering Szymanowski and Debussy to his style of playing.

According to Jürgen Otten, the autobiographer of conductor Herbert von Karajan, Blechacz plays with sophistication and authority, which is unusual given his young age. Blechacz juxtaposes bravery, characteristic to young players, with poetic sensitivity. The two extremes come as one in Blechacz’s energetic playing.” ::

Polish-Danish collaboration Sponsoring is the name of the recent movie by Małgorzata Szumowska, co-produced by Zentropa International Poland, the Polish leg of a movie producing network set up by Lars von Trier, the renowned Danish director. The movie opened Berlinale, an international movie festival in Berlin this year, and, critics say, more honors at international festivals are on its way. ::

Picture courtesy of Teatr Buffo

Musical with 3D projection Polita is the name of the first Polish musical in 3D, on show in Warsaw’s Torwar sports arena in mid-March.

In addition to the electronic side of the show about Pola Negri, an actress who made it from rugs to riches in Hollywood, there are ballet, theater, and musical elements played out by live actors on stage. The show is another brilliant production from the creative team: choreographer and director Janusz Józefowicz and composer Janusz Stokłosa. The cast includes Natasza Urbańska as Pola Negri and Stefano Tarrazzino as Negri’s lover Rudolf Valentino. :: 2/2012 :: polish market :: 73

Culture

A hit in the opera!

Sergei Prokofiev’s War and Peace is one of the most monumental operas of all time. On 27 March 2012 the Mariinsky Theater of St. Petersburg will stage it at the Grand Theatre—National Opera. It will be the first guest appearance by this legendary ensemble in Warsaw.

President Bronisław Komorowski extended its patronage over this event.

Maciej Proliński 11 March 2000 on the stage of the Mariinsky Theater.

Opened in 1860, St. Petersburg’s theater is today, alongside Moscow’s Bolshoi, one of the most preeminent Russian musical arenas, nurturing rich traditions and bringing together formidable singers, dancers and choreographers. Valery Gergiev, who became its chief conductor and artistic director by the end of 1980’s, rendered the Mariinsky Theater one of the most prestigious opera houses in the world. Mr Georgiev, who is also the principal conductor of the London Symphony Orchestra, will be heading the Mariinsky’s team in Warsaw.

Photos © 2009 Valentin M.Baranovsky

It is a huge undertaking which will actually become yet another première of the season. War and Peace by Prokofiev is an imposing spectacle. Polish-Russian cultural relations have not seen such an event for over two decades says Director General of Warsaw’s opera house, Waldemar Dąbrowski.

The performance was directed by the world-famous film-maker Andrei Konchalovsky. The spectacular performance, with a duration of almost four hours and a cast of 400 actors and 60 soloists, has already been shown with great success in New York, London, Paris and Tokyo. Co-produced with the New York Metropolitan Opera, it had its première on

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War and Peace, an adaptation of Leo Tolstoy’s (1828-1910) classical novel first published in 1869 and telling the story of the Russian aristocracy in the tempestuous Napoleonic era, was Prokofiev’s beloved brainchild. This monumental musical fresco has no equal in the opera literature. Sergei Prokofiev (1891-1953) worked on it for over ten years!

Eventually, he had to considerably shorten the masterpiece of one of the finest Russian novelists, his idea being to present a series of meaningful scenes understandable for the audience that perfectly knew the book.

Along with Igor Stravinsky and Dmitri Shostakovich, Sergei Prokofiev counts among the champions of the 20th century’s Russian music. His work is usually classified under “neoclassicism” on account of its unique combination of lyricism and grotesque. Unfortunately, the composer’s lifetime coincided with the rise to power and rule of one of the bloodiest dictators in history, Josef Stalin. By the end of 1930’s—the period known as the Great Terror—Prokofiev decided to return for good from France to the Soviet Union, where, apart from composing, he dealt with teaching. Rehearsals for War and Peace were soon interrupted. Censorship agents ruled that the figure of Napoleon as it was featured in the opera might prompt associations with Stalin… The opera premièred in Leningrad in 1946. It was also chosen to mark the inauguration of the Sydney Opera House in 1973. So far, it has never been staged in Poland.

There are many reasons why it is worth rediscovering this beautiful story set at the time of Napoleon’s campaigns, on which subjugated Poles placed such great hopes. Not least because in the ball scene with tsar Alexander I, they are first dancing the Polonaise and then the dashing Mazur. You are welcome!, says Waldemar Dąbrowski. ::

Richard Wagner

THE FLYING DUTCHMAN CALDERoN / TRELIńskI / kUDLIčkA PREMIERE 16/03/2012 NEXT PERFoRMANCEs 18, 20/03; 25, 27, 29/04/2012

Culture

A sponsored life…

This year Polish Market will be giving accounts of Polish films that are universal, moving, intelligent—worth seeing. Films that can well be shown at international festivals. In February we recommend “Sponsoring” by Małgorzata Szumowska, one of the most awardwinning young Polish film directors.

Maciej Proliński willful. Sometimes crisp, sometimes nasty, often underlied with a fantastic sense of humor, but deep down so lyrical and female…

“33 Scenes from Life” was awarded with the Silver Leopard at the International Film Festival in Locarno. The film enabled the young Polish film director make herself recognizable with a wider, global audience.

“Sponsoring” is a Polish-French-GermanDanish coproduction. The Danish stakeholder is Zentropa International Poland, a recently established branch of Lars von Trier’s film studio dealing with Polish projects. The main part was played by Juliette Binoche, a great French actress, who won an Oscar for her role in Anthony Minghella’s “The English Patient”, and a Cesar for “Three Colors: Blue” by Krzysztof Kieślowski. The film features the Polish “export” team: Joanna Kulig, Krystyna Janda, Andrzej Chyra, and the rising star of the French cinema, Anaïs Demoustier.

In her new film Szumowska penetrates into the world of young call girls. Anna (Binoche), a well-off journalist for “Elle” in Paris, married and mother to two sons, is writing an article about prostitution among female students. An encounter with two young women: a Polish student Alicja (Kulig) and a French one, Charlotte (Demoustier) becomes a upsetting experience that disturbs her life. These meetings compel her over time to ask herself uncomfortable questions about intimacy, libertarian views, generalized hypocrisy of the social life.

But, beware, it is not a simple, didactic cinema. “Sponsoring” does not tell you straight

Photos courtesy of Kino Świat

The world première of “Sponsoring” was held at the 36th International Film Festival in Toronto. The screening took place as part of one of the three most important sections—“Special Presentations”, alongside the latest pictures by such icons of the cinema as Britain’s, Michael Winterbottom and Denmark’s, Lars von Trier. The film received acclaim not only from the critics and the audience, but was also sold for mass distribution in over 30 countries worldwide. It will soon reach cinemas in the United States, the United Kingdom, Spain, Brazil, Venezuela, Hong Kong, South Korea and other countries. On 10 February 2012 the film opened the prestigious Panorama 62 at the Berlin International Film Festival, and on 17 February it went on general release in Poland.

Małgorzata Szumowska, once a student of Wojciech Jerzy Has (1925-2000), one of the greatest film directors in the history of Polish cinema, is now fascinated by striking and seditious pictures of Lars von Trier. It is already for a decade that she has been making by herself important, brave and much-needed films, which are often beneficially painful and provocative…

Her previous picture, “33 Scenes from Life” (2008), which tells the autobiographical story of a thirty-something female artist, is one of the best Polish films in recent years and, at the same time, one of the few mature attempts of confronting the issue of death by young Polish filmmakers. That film had already unveiled the nature of Szumowska’s work. The work of a person faithful to herself, the work free of stylization, and yet strongly

forward what deserves to be denounced and what is “the only right value”. This being said, it is quite obvious that prostitution serves here as a starting point for further discussion on a sponsored, bourgeois life… How much is all that capitalist stability worth here? Closed within sterile walls and decorated with classical music… “Good style, good class”—but not of highest, not to say rotten, quality…

Szumowska provokes, irritates and amuses. And she does so with a genuine filmmaker’s talent.

“Sponsoring” is one of these films that both in its form and its content do not leave you indifferent. Especially the ending, seemingly quiet “as if nothing happened”, and in fact so symptomatic, artistically damaging all that initial order from before the day Anna met the students, must cause pain and it does…

“This is a very personal story. I put a lot of my own fears in Anna, and so did Juliette, we were both building this character out of private emotions, our own intimacy. That is why each screening of this film is something I feel strongly about. And the end is painful, but it must be so. You cannot do otherwise”, says Małgorzata Szumowska.

“Małgośka does not spare anyone, but it is up to us to draw conclusions. Małgośka’s idea is simple: call into question morality of society as a whole rather than that of the main characters,” says Juliette Binoche.

A meeting between the two ladies gave rise to an important piece of work. That’s for sure. And how was their cooperation on the film set? “Juliette had total confidence in me.

It has never happened to me with any actor.

She gave me room so that I could fulfill myself. I believe she “modeled me” as a mature film director. That was an amazing cooperation and great mutual confidence,” stressed Szumowska.

“Right from the beginning, there were mutual understanding and respect between us.

I could intuitively feel that an important part of Małgośka herself belonged to this story, to this film – she wanted to take it out of her into the world. That was an artistic, emotional and intellectual awakening”, says Binoche. ::

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Advertorial

Silesian Laurels have been awarded!

The 20th edition of the “Laurels of Abilities and Competence” gala is now history. This year, the highest distinction — the Diamond Laurel — was awarded to José Manuel Barroso, President of the European Commission, and Donald Tusk, Polish Prime Minister. Mr Barroso made it in person to receive the Laurel. In his speech, he repeatedly stressed the role that Poland has played, and still does, in the European Union. “Thanks to Poland’s enthusiasm, the European Union will emerge from the crisis stronger,” said claimed. Mr Barosso also pointed out that Europe is not only Brussels or the member states’ capital cities, but above all regions.

The Crystal Laurels of Abilities and Competence went to professor Andrzej Karbownik, Rector of the Silesian University of Technology and Teresa Mokrysz, co-owner of the Mokate Group.

Among the Platinum Laurels’ recipients were Maciej Szpunar, Undersecretary of State in the Ministry of Foreign Affairs, Małgorzata Handzlik, Member of the European Parliament, Elżbieta Bieńkowska, Minister of Regional Development, and Zygmunt Łukaszczyk, Governor of the Silesia Province.

The Golden Laurels were presented to: Mirosława Nykiel, Member of Parliament, The Katowice City Singers’ Ensemble Camerata Silesia, Adam Sojka, journalist of TVP Katowice, Józef Wycisk, journalist of Polskie Radio Katowice, Programme Council and Bureau of the European Capital of Culture 2016 Katowice.

This year’s laureates include 52 companies, institutions and personalities from the world of science, culture, politics, economy and entrepreneurship. Laureates pointed out that such a distinction encourages and motivates them to work even harder.

On the occasion of the 20th anniversary of the “Laurels of Abilities and Competence” gala a special prize— the Eagle of the Silesian P ­ iasts—was awarded to Professor Jerzy Buzek.

Additionally, personalities who contributed to the successful holding of

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Professor Jerzy Buzek was awarded a special prize – the Eagle of the Silesian Piasts

José Manuel Barroso, President of the European Commission was awarded the Diamond Laurel

Musical “Buffo Hits”

twenty editions of the Laurels gala were honoured with special distinctions in the form of miniature statuettes of the Eagle of the Silesian Piasts.

Among the laureates were Damian Zimoń, Archbishop Emeritus of the Archdiocese of Katowice, Alfons Nossol, Archbishop Emeritus of the

Archdiocese of Opole; Cities of Zabrze, Katowice and Bielsko-Biała; Telewizja Polska Katowice, Pols­k ie Radio Katowice, Polskapresse Sp. z o.o. Oddział Prasa Śląska, Polish Chamber of Commerce, Bielsko - Biała Chamber of Commerce and Industry and Industrial and Comercial Chamber- Rybnik.

“Laurels of Abilities and Competence”, awarded by the Laurels’ Jury, have been granted for 20 years. “The significance of the Laurels is in discovering people who have in themselves an extraordinary value. Taken all together, these people make for the potential of Silesia,” said Tadeusz Donocik, President of the Chamber of Commerce and Industry in Katowice and President of the Laurels’ Jury.

The Laurels’ history counts several hundred laureates, among whom are such personalities as: Lech Wałęsa, Pope John Paul II, Javier Solana, Jan Nowak Jeziorański, Aleksander Kwaśniewski, Vaclav Havel, Cardinal Stanisław Dziwisz, Professor Władysław Bartoszewski, Professor Leszek Balcerowicz, Andrzej Wajda, Krzysztof Zanussi and Bogdan Borusewicz. “Since the very beginning, we have aimed high. When the initiative appeared, we started to search for authorities. The previous regime collapsed almost overnight, and we needed to find some new points of reference. On the other hand, we wanted to feature people who act as change drivers – not only in economy, but also in culture, science or Church. All these spheres create a system of communicating vessels, and displaying this system is one of the Laurels’ missions,” said Mr Donocik.

This year’s Laurels’ gala was illuminated by the exceptional musical entitled “Buffo Hits”, directed by Janusz Józefowicz and Janusz Stokłosa, with the participation of Natasza Urbańska and the best performers from the Studio Buffo theatre.

Artists, for whom this was the first time with this programme in Silesia, performed the greatest hits from their repertoire. ::

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Events

Business Center Club picks role models

Award winners and honorary guests on stage for photographers

Leading business organization honors outstanding companies, business personalities and politicians

In January, Poland’s landmark cultural institution, the Grand Theater and National Opera, was the venue of the Business Center Club Gala which marked the grand finale of the BCC flagship awards, the Leaders of Polish Business.

CEOs and presidents of 11 companies took home the Leader of the Polish Business Gold Statuettes: construction company that specializes in archeological works, AKME Zdzisław Wiśniewski; banking cooperative Bank Polskiej Spółdzielczości; power company ENEA; one of the largest producers of power boilers, Energoinstal; cigarette manufacturer Imperial Tobacco Polska; producer of self-adhesive and laminated components for building, construction, electrical and automotive sectors Interchemall; supplier of steel products for construction PZM Vimex; supplier of chimney and ventilation systems Schiedel; furniture producer Szynaka Meble; car producer Volkswagen; and producer of military

vehicles and mechanic equipment, Wojskowe Zakłady Mechaniczne.

Deputy Prime Minister Waldemark Pawlak, one of special quests at the gala, said that the winners reflect the best of Polish entrepreneurial spirit which is such that helps businesses perform well in any economic circumstances. “Because of such companies as you,” Pawlak said to the winners, “Poland could make it through difficult moments in the last 20 years of Poland’s economic transformation.”

Along with Waldemar Pawlak, honorary guests at the gala were Finance Minster Jacek Rostowski, former President of the EU Parliament Jerzy Buzek and former Economy Minister Janusz Steinhoff.

Addressing the winners of the BCC Business Leader awards Rostowski said that because Poland is the fastest growing economy in the European Union, the winners “are, no doubt, the best companies in Europe.”

Social solidarity The winners reflect the best of Polish entrepreneurial spirit which is such that helps businesses perform well in any economic circumstances. Because of such companies Poland could make it through difficult moments in the last 20 years of Poland’s economic transformation.

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Along with companies the BCC awards went also to individuals. Paweł Anto­ nik, president of Strabag, a construction company, and Ryszard Krauze, president of Prokom Investments, a group of companies in different

industries, received the Medal of Social Solidarity, for their engagement in social-betterment and charitable projects. Bishop Piotr Jarecki, who presented the medals, said that business leaders are responsible for managing “the sector of labor, which is the right and the duty of every person.” Bp. Jarecki added that the article 20 of Poland’s Constitution underlines “social economy” as the staple of the country’s economic system. “It [social economy] combines efficiency with solidarity with people who need support,” Bp. Jarecki said.

Special Awards This year the BCC granted Special Awards, a distinction for individuals outside of the business community whose work has significantly contributed to the development of entrepreneurship in Poland. Former Prime Minister Hanna Suchocka received the honor for setting up the staples of Poland’s free market economy as head of the government in 1992-1993, the first phase of Poland’s economic transformation, and for maintaining good relations with the Vatican in that time.

In turn, Turkish Prime Minister Recep Tayyip Erdoğan received Special Award for leading difficult reforms that have

Events Hanna Suchocka receives the award from Marek Goliszewski

Look into the future Marek Goliszewski, BCC president, noted in his speech that while the

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going is good the government must not forget about further reforms that will make the Polish economy even more efficient and competitive in the global scene. He noted that while the Polish business community has a deep understanding of government reforms that aim at improving the country’s finances the government should focus on selling the logics of the reforms to the public opinion. Goliszewski encouraged Prime Minister Tusk to continue his bold reforms by quoting former British PM Margaret Thatcher who warned that a politician who wants to be liked by everyone will achieve nothing. ::

How Leaders of Polish Business work Once a company wins the Leader of the Polish Business Gold Statuette, it may be furthermore rewarded for its continuous compliance with the values the title represents by being granted consecutive Diamonds to the Statuette. For 2011 their 10th Diamond received Cereal Partners Poland Toruń-Pacific. Starprofil and TFP received their 9th Diamonds. Cykoria—7th; Kruszgeo— 6th; Polskie Składy Budowlane and Kombinat Budowlany—5th; Strabag—4th; Ferro Grupa Ferro and Malow Grupa Liptol—3rd; Gdańsk Lech Wałęsa Airport—2nd. Their first diamond received Oskar, Delic-Pol, Bumar Żołnierz, Społeczna Akademia Nauk, TTI, Unibep, and Żywiec Zdrój. ::

Ryszard Krauze, of Prokom Investments, receives Medal of Social Solidarity from Bp. Piotr Jarecki

Photos courtesy of BCC

made Turkey a strong and reliable partner of the European Union.

Prof. Stanisław Gomułka, BCC chief economist, who introduced Hanna Suchocka, said that in fall 1992 the Suchocka government passed in the Parliament a bill which cut the budget deficit by 5% GDP in a year. “It was a bold step in political terms and such which is today unthinkable,” Prof.

Gomułka said.

In her short speech Suchocka said that the government she was at the helm of did their best to start a social economy based on the free market mechanism. She noted that while an economy that is socially fair was the goal for her government, her ministers had to also focus on delivering stimulus for an ordinary free market economy to take off.

Honorary guest of the gala, former President of the EU Parliament Jerzy Buzek introduced the accomplishments of the Turkish prime minister underlining that Erdogan had initiated social and economic reforms that make Turkey an ever attractive partner for many countries including Poland.

“Recently we have seen an increase in bilateral contacts of our trade missions,” Buzek said. “Polish companies take active part in trade shows in Turkey while Polish-Turkish consortia take part in major investment projects. We have seen a positive change in visa issuing procedures, which were changed in accordance with the opinions voiced by the Polish business circles. We have opened to Turkey and worked to reinforce our bilateral relations.”

Turkish Deputy Prime Minister Ali Babacan, who on behalf of his boss accepted Special Award, said that Poland and Turkey have excellent bilateral relations. In turn, in a televised message to the participants of the gala, Prime Minister Erdogan said that Turkey should be admitted to the European Community as soon as possible because it is the EU not Turkey who has been losing out on Turkey’s absence in the union.

Waldemar Pawlak added that Turkey is one of the countries today who could find the right balance between its national interest and the interests of the global economy.

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HIT ROKU 2012 DLA INSTYTUCJI FINANSOWYCH oraz LIDER INFORMATYKI INSTYTUCJI FINANSOWYCH 2011 przedstawimy Państwu na łamach marcowego wydania naszego miesięcznika.

Prezentacja zwycięzców obu konkursów oraz pełna relacja z gali wręczenia nagród już w kwietniowym wydaniu „Gazety Bankowej”!

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Events Gold Medal Laureates Longin Komołowski, Chairman of the Polish Paralympic Committee; Andrzej Szarmach, former member of the Polish National Soccer Team, Prof. Danuta Hübner, Irena Szewińska and Prof. Henryk Skarżyński.

Academy of Polish Success hands out awards Prime Minister and head of UEFA honored by business organization

and Zbigniew Boniek. Special distinctions, the Honorary Special Award 2011, went to prime minister Donald Tusk, while the Oscar of Polish Business to UEFA president Michel Platini. Three companies, construction specialist Hydrobudowa, underwriting fund Ubezpieczeniowy Fundusz Gwarancyjny, and insurance company BRE Ubezpieczenia

In December the Academy of Polish Success, affiliated to the Polish Business Club, handed its awards to individuals who contributed to the development of business in Poland, at Porczyński Gallery in Warsaw.

The Medals of the Academy of Polish Success went to, among others, former national soccer team members Andrzej Szarmach

Showing lives with inner dimension

Krystyna Woźniak Trzosek, the publisher of this magazine, Cardinal Kazimierz Nycz, Barbara Lorynowicz

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Photo by Błażej Grabowski

Barbara Lorynowicz presents two movies that promote faith, compassion and charity Polish movie producer and documentarist Barbara Lorynowicz met with Jabłonna local government officials, local business people and senior Catholic Church representatives to present two movies depicting the lives of two compassionate and inspiring individuals: Mother Teresa of Calcutta and Pope John Paul II. “The World of Mother Teresa” was shot in 1996 in India where Lorynowicz and her crew spent 40 days plus waiting for Mother Teresa’s consent for the interview. Lorynowicz used music composed by renown Polish composer Krzysztof Penderecki to reinforce Mother Teresa’s religious message.

In turn, “The Year of the Pope,” made in 1997, focuses on the activities of the “Polish Pope” in the Vatican, filmed between

took home the title of the Company of the Year 2011. The retail chain MarcPol, ceramic producer Grupa Tubądzin, casino operator Olympic Casino Poland, television Canal + Cyfrowy and interior decoration specialist Drawex received awards for their achievements in corporate social responsibility in 2011. Chiefs of the Ukrainian Football Association, Hryhoriy Surkis, and its Polish equivalent, Miachał Listkiewicz, both received the title of the Honorary Ambassador for Polish Business. ::

Christmas 1996 and Easter 1997. The camera is a mute witness to Pope’s prayers. The music used in the movie, the Beatus vir psalm, was composed by another Polish renowed composer, the late Mikołaj Górecki, who had dedicated it to the Pope in 1979.

“Both movies show that it is not easy to live a life of a saint, and it is not easy to document a sainthood,” said Cardinal Kazimierz Nycz. “Both movies, however, bring the two characters closer to the viewer and show us the difficult beauty of the two saint people.”

Barbara Lorynowicz is a journalist and movie director. She graduated from the Łódź Film School and the Institute of Movie Production in Smolensk, Ukraine. Since 1997 Lorynowicz has been collaborating with Jerzy Hoffmann, a renown movie director who specializes in huge historic productions.

Individuals such as Mother Teresa, and Pope John Paul II, are inspiring figures for a huge part of Polish entrepreneurs who apply the social and economic teachings of Catholic Church in such areas as corporate social responsibility and charitable activities. ::

TUBĄDZIN GROUP

– Creator of New Trends Tubądzin Group is one of the leading producers of ceramic tiles in Poland. For many years, it has consistently pursued a policy based on development and openness to market changes and clients’ needs. The Group’s aim is to best accommodate expectations of its ever-growing group of clients, through the continual widening of assortment and coherent marketing activities.

Colour – Tubądzin

Modern Wood – Tubądzin

Tokyo – Tubądzin Maciej Zień Collection

At a time when the space we live in often reflects emotions, passions, personalities and styles, it is necessary while searching for inspirations to go beyond clichés, overcome traditional barriers, look at the usual schemes from a fresh perspective. Indoor space arrangement is not only about functionality, but it is also about creating trends and fashion. New collections and patterns that were first shown in Paris, London or Milan, soon find themselves mirrored in space arrangement, ceramic tiles, furniture, decoration details. That is why one of the most important fields of activity of Tubądzin Group is design. The Group strives to create new trends, which is can be observed in their products: for example, the cooperation with the world of fashion gave rise to collections branded Tubądzin creation by Maciej Zień, while minimalism and natural inspirations are at the origin of the brand Natura di Terra.

Tubądzin Group comprises three manufacturing sites – in Ozorków, Tubądzin and Mogendorf (Germany), as well as the Logistical Centre in Cedrowice.

Lido – Natura di Terra

The production is based on the stateof-the-art technologies and standards, innovative solutions, and finely assorted, highest-level materials. Currently, Tubądzin Group involves: :: 4 brands - TUBĄDZIN, DOMINO, ARTE i KORZILIUS directed at different groups of clients,

:: Sub-brands: Tubądzin creation by Maciej Zień, Natura di Terra, Colour, Struktura :: Over 200 collections of wall and floor and universal tiles Products by the Group are available not only on the domestic market, but also in many other countries: Russia, Belorussia, Lithuania, Latvia, Estonia, Ukraine, Germany, France, Belgium, The Netherlands, The United Kingdom, Ireland, Sweden, Norway, the Czech Republic, Slovakia, Hungary, Romania, Bulgaria, Austria, Greece, Kazakhstan, Moldova.

The Group’s dynamic development is appreciated by clients, various economic institutions and independent experts.

The Group’s dynamic development is appreciated by clients, various economic institutions and independent experts.

Tubądzin Group has won several awards, the most imminent of which are: Promotional Emblem “Teraz Polska”; title “Good Design” granted in recognition of the originality of collections; “Pearls of EU Ceramics” and “Pearls of EU Ceramics Distributors” awarded to individual collections since 2004; statuette “Bathroom – Choice of The Year” presented for quality and design excellence in 2005, 2007, 2008, 2009 and 2011. ::

Advertorial

Master chefs discover ecology The aspirations of eco-food producers in Poland are growing Waldemar Sadowski

Paweł Krajmas, Marcin Suchenek, Ernest Jagodziński, Maciej Fabisiak

The good old times, when there was only one type of farming in the world, the natural farming, are in the memory of few people in Europe.

But in Poland many people remember them because chemical substances in farming and industrial approach to agriculture made a very late entry into the country. Until now the most common type of agricultural production is that of a small family-run farm where the knowledge about the ecologically balanced farming and land cultivation and the respect of nature, have been passed from generation to generation until today.

However, the inevitable modernization of farming has led the food industry split into two separate domains: conventional which uses industrial technics and technologies and ecological which uses natural processes. Initially, the latter was the domain of pioneers, a small group of enthusiasts. In time the idea of eco-farming has spread and is slowly getting out of its niche. Regulations governing eco-farming have popped up, so have done eco-brands, quality control standards and certifying agencies.

Recently executive chefs talk enthusiastically about the way they use ecological products. Marcin

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Suchenek, executive chef of the Hyatt Warsaw, says that he has been using ecological raw materials for several years in his kitchen at Hyatt and at home. As a young father Suchenek masters the art of cooking for his son, for whom he always picks the best products.

Marcin Suchenek, a graduate of the University of Gastronomy and Hotel Industry in Warsaw, learned cooking from the renowned Austrian chef Kurt Scheller working as an apprentice at the Sheraton Warsaw in 1997-2001. This is where his professional career started. He followed to learn the art of cooking working under such renowned chefs as Stefano Bonafe, Fabio Brambilla and Antonio Torino.

Spreading enthusiasm “I knew ecological products because they were popular with restaurant goers,” Suchenek says. “But I got to know them better when I met Paweł Krajmas, president of the Polish Ecology Association, who passed on me his passion for ecological food.”

Krajmas runs a ecological meat processing company, Jasiołka, in south-eastern Poland. The place, in between the Lower Beskidy mountain range and the Bieszczady mountains, is one of the most pristine areas of the country. In addition to Suchenek, Krajmas passed his enthusiasm for eco-food to other Warsaw executive chefs, Ernest Jagodziński and Maciej Fabisiak.

“It is hard to say when exactly I began to use ecological products in my kitchen,” says Jagodziński. “It’s thanks to people like Paweł Krajmas that I rediscovered products that I used to know in my childhood. I began to see the difference between the products we buy everyday and those from eco-farms.”

Jagodziński is the chef of Downtown, a restaurant at the InterContinental Warsaw. Downtown serves quality beef in Polish and international

dishes. “Ecological products differ from conventional products when it comes to their taste, look, sometimes color and fabric, always the nutritious qualities they deliver to our body,” Jagodziński says. “It is difficult to compare the taste of a tomato that I remember from my childhood (or my private garden) to the taste of a tomato I buy at a grocery store which in fact is a tasteless mass with no flavor that only looks like a tomato.

Jagodziński uses a whole range of ecological products in his kitchen, from young vegetables, seasonal vegetables, salads, fresh vegetable and fruit juices. When it comes to meat, Jagodziński uses mainly poultry and pork.

Maciej Fabisiak, chef at the Warsaw’s Restauracja 99, is also a big proponent of ecological products. “When I first tried ecological foods I fell in love with them from the first bite I took,” Fabisiak says. “My favorite ecological products are bacon long-seasoned in salt, fallow deer ham, spelt bread, and sausage with liver.”

Fabisiak uses ecological products in his home kitchen as well. “Ecological products are different than conventional products the way they taste and look,” he says. “When you eat eco products you can actually taste it.

With conventional products what you taste are taste boosters— chemical additives that often are added to improve the product looks as well. Ecological foods give you natural taste. There are not chemical additives there to spoil the taste,” Fabisiak says.

Let’s work together The Polska Ekologia Association, a trade organization for the producers of ecological products, organizes many culinary events, which means that the demand for ecological food is growing.

One of the largest events took place in January under the auspices of the Great Orchestra of of Christmas Charity. The stars of the show were Jagodziński, Fabisiak, and Suchenek who, in a makeshift kitchen in the Warsaw city center, served steaks, hams and blood sausages. For many people it was a good opportunity to taste how delicious may

Advertorial Eco-dish recommended by Marcin Suchenek Fried duck in marjoram with red cabbage in chokeberry wine served with potato slices, orange sauce with green pepper. Serving two.

Ingredients Duck – one piece; potato – 100 g, red cabbage – 100 g; oranges – 2 pieces; apples – 2 pieces; onion – 30 g; two cloves of garlic; marjoram – 0.1 g; green pepper brine – 0.1 g; red chokeberry wine – 100 ml; butter – 0.1 g; olive oil, sea salt, pepper.

Directions Cut apple and orange into cubes, add garlic and marjoram, season the mix and stuff it into the duck, rub seasoning and marjoram into duck skin and shelf until next day. When the duck marinates can be fried at home oven in frying bag at 150 Celsius for 1.5 hours.

Simultaneously, use the oven to bake big potato with skin, wrapped in aluminum foil.

Boil red cabbage in chokeberry wine, add salt, pepper, and sprinkle it with brown sugar.

Take the potato out of the oven, slice, and fry on pane.

Juice one orange, reduce on frying pan with brown sugar, add green pepper and butter. In the mixture warm pieces of apple.

Take duck from oven, piece it, serve with additions, season with marjoram, wet with sauce and olive oil.

Eco-dish recommended by Maciej Fabisiak Long-seasoned bacon in salt served with crispy toast of spelt bread and marinated onion, thyme and caraway. Serving two.

Ingredients Bacon – 20 g; spelt bread – 3 slices; 1 big onion; white wine – 50 g; fresh thyme; caraway, salt, pepper, oil.

Directions Slice bacon, roll three roses.

Prepare marinate as follows: slice onion, warm caraway on frying pan until flavor releases.

Fry onion slices with oil until glowing brown, add thyme leafs and fry mix. Add white wine and stew until wine evaporates and onion marinates, season with salt and pepper.

Wet bread slices with oil and toast on dry pan. Cut squares sized 4×4 cm, serve on plate, top with onion marinate and bacon roses. Season with oil and add thyme toppings.

be ecological dishes. The proceeds from the food sales were donated to the Orchestra. Additional funds were raised

by Marek Sawicki, minister of agriculture, who was collecting money from people in front of the tent.

Future looks healthy The Polish sector of ecological foods is going out of the niche relatively fast.

It builds the confidence of wide consumer groups. The process is driven by the growing ecological awareness among consumers and the predominance of healthy lifestyles. A significant contribution in this respect has been made by the Polska Ekologia through

promotional events and campaigns orchestrated by the organization. In addition, the Ministry of Agriculture has laid the ground for the development of ecological agriculture as farmers are educated to relay on their knowledge of nature instead of chemical substances.

Further development of ecological agriculture is limited by the relatively low purchasing power of the Polish consumer. Even those consumers who respect ecological products sometimes have no choice but to buy conventional food because they can not afford ecological. Regardless of those limits, Polish eco-food producers have reached the critical mass which lets them eye

European markets for expansion. With clean soil, and the highest biodiversity indicators in the EU, and excellent culinary traditions, Polish farmers may win many hearts of European foodies. ::

The Association of Polish Organic Food Producers and Processors, Polska Ekologia: ( headquartered in Warsaw)

ul. Miodowa 14 00-246 Warsaw www.polskaekologia.org e-mail: info@polskaekologia.org

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Advertorial

Investing in training Bożena Skarżyńska

Speakers, Prof.

Andrzej Pisula, dr Kazimierz Dąbrowski and Prof. Stanisław Gwiazda The participants of the conference Effective Cost Management in Meat Processing Business

The Association of Butchers and Meat Processors of the Polish Republic (SRiWRP) is one of the few trade organizations that run conferences and training programs for its members and meat industry professionals. Such meetings are highly regarded by the attendees who get deeper insights into the industry as well as learn about the economy and trade.

2012 is a jubilee year for the association which is now 90 years old. To

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celebrate the anniversary the association has put a busy schedule: meetings, symposia and conferences for knowledge and experience sharing, showcasing new technologies and applications will dominate the association’s activities. All this to help the Polish meat industry maintain its high position in Europe and globally.

The Polish meat industry, especially its processing arm, is one of the most modernized industries in

Europe today thanks to the investment projects undertaken before Poland’s accession to the EU. Since then the industry has generated a huge knowhow which now is shared at conferences organized by the association.

One of the programs, running for three years now, is info seminars about the changes in EU regulations governing food safety and the food marking systems. The most popular were workshops organized by Prof.

Stanisław Gwiazda.

One such workshop that attracted over 120 attendees, was entitled Effective Cost Management in Meat Processing Business, organized by the association in Wielkopolska in cooperation with the Ministry of Agriculture, the association Polska Ekologia and the transaction platform Wollumen. The conference speakers agreed that companies which know how to effectively manage their business will find it easier to live through 2012, a year that seems to be difficult for the food industry. On the agenda were such issues as the effective use of raw materials, cutting the logistics costs, using modern tools and applications which boost work efficiency.

Last but not least, energy efficiency and alternative energy sources were also in the spotlight.

Among the speakers were such renowned specialists as Prof. Andrzej Pisula, Prof. Stanisław Gwiazda, Dr. Kazimierz Dąbrowski, and Dr. Stanisław Kwiatoń.

It was universally acknowledged by the conference participants that the issues raised at the conference were critical. Most of the topics will be discussed further at workshops and conferences announced by Janusz Rodziewicz, president of the association.

Conferences for owners, managers and technological personnel in food processing companies is just one of the many activities of the association. Equally important are programs aimed at promoting food in Poland and abroad. The association has undertaken two programs so far: European Table, which aims at promoting meat made in Europe outside of the continent, and Świętomięs, a roadshow scheduled in the largest Polish cities. ::

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